What Is A Payment Gateway? Benefits, Features & Types Payjunction

An international payment gateway (or global payment gateway) enables businesses to accept payments from customers in different countries. This option is ideal for larger businesses that want to control the entire checkout experience via their own systems and servers. To that end, on-site payments give companies – particularly enterprise-level corporations with the means and support – more control and flexibility over payment processing.

Step 2: Customer Makes A Purchase

When you accept credit card payments through a payment gateway like one of ours, you can seamlessly take payments in person and online, get paid faster, and worry less. A payment gateway is a digital tool that facilitates transactions by securely transferring payment information from the customer to the merchant’s acquiring bank and back. These gateways ensure that sensitive information—like credit card details—is encrypted and protected during the payment process. India’s digital payment market crossed Rs. 3,500 lakh crore in FY24, powered by UPI, card payments, and online commerce. UPI alone now processes over 12 billion transactions monthly (RBI & NPCI), and global studies reveal that 17% of shoppers abandon carts due to payment security concerns.

• A payment gateway is more than a transactional tool—it’s your partner in building a customer-friendly, future-proof business.
• Payment gateways like Stripe and PayFunnels are crucial tools for any business looking to accept payments securely and efficiently.
• Payment gateway providers include financial institutions (e.g., banks), dedicated payment service providers, and specialized fintech companies.
• The front-end technology sends customer information to the merchant’s acquiring bank (business bank account) for processing.

By ensuring that payment data is captured and transmitted securely, these technologies provide a seamless experience for both merchants and customers. Authorize.net offers both merchant accounts and payment gateways as an all-in-one plan or separately, along with all the features mentioned above. In other words, whether you need to set up a new merchant account through us or your own bank, we can help your business accept payments. Payment gateways are essential for online businesses to accept digital payments securely.

Merchant Insights

Google may charge a merchant account a merchant fee of up to 4% for in-store payments. That means customers could pay up to 6% extra just for using their credit card through Google Pay. It’s a simple way for the retailer to handle accepting online payments. Use a redirect payment gateway to get the safety and security of a major platform. However, it translates to an additional step for customers and less control over the merchant’s process.

Comparatively, a payment gateway refers to a broader service that processes various payment methods, such as PayPal. If you accept (or want to accept) credit card payments online or on a mobile device, you’ll need a payment gateway. Without it, you won’t be able to verify a customer’s credit card information, process payments, or finalize the sale. As a merchant, it’s important to protect your customers’ credit card data. If customers don’t trust your website with their information, they’re unlikely to complete the sale.

This is because your customer isn’t redirected to a separate webpage. Likewise, as the merchant, you have full control over your customers’ checkout process. Transaction verificationThe acquiring bank routes the transaction data to the customer’s issuing bank or the appropriate payment processor for authorisation. The issuing bank or payment processor verifies the transaction details, including the customer’s account balance and the validity of the payment method.

Throughout the transaction process, advanced encryption and multiple security layers protect sensitive data. Payment gateways use industry-standard encryption protocols like Secure Socket Layer (SSL) to safeguard cardholder information. All U.S. organizations handling payment cardholder data must meet strict Payment Card Industry Data Security Standards (PCI DSS) —a set of requirements designed to prevent fraud and data breaches. Payment gateways like Stripe and PayFunnels are crucial tools for any business looking to accept payments securely and efficiently. While Stripe offers advanced features and customization for large-scale operations, PayFunnels provides simplicity and accessibility for small businesses and solopreneurs.

The payment gateway works by giving the customer a way to buy online. The process of online transactions is a swift, very accurate electronic exchange. During this exchange, money is protected, safeguarded, and transferred. Millions of companies use Square to take payments, manage staff, and conduct business in-store and online. Start with Stripe, PayPal, or Square if you’re new to ecommerce. Once you grow, you can compare more advanced options to reduce costs or get more features.

The payment gateway is required to make it happen in any online purchase. Brazil is Latin America’s most important e-commerce market and one of the fastest-growing worldwide. A sophisticated payment system is imperative, and in emerging tech regions like Brazil, the payment gateway is the key to successful, easy transactions.

Learn what payment gateways are, how they work and how they serve you and your customers. First, the payment gateway encrypts payment data and tokenizes it for secure transfer between the seller and the buyer. No matter your business size or model, choosing the right payment gateway can streamline your operations, improve customer experience, and boost your revenue. The payment process involves many necessary steps to ensure everything goes smoothly and safely.

You can customize it to accept multiple payment methods, depending on your needs. Once your online store is set up, the first step is integrating a payment gateway to ensure secure transactions. This enables both merchants and customers to safely process payments with complete transparency. Some aggregators include a built-in payment gateway, providing an all-in-one solution for merchants. A single gateway can support online, mobile, and in-store transactions, ensuring harmonious integration across all payment platforms. A gateway must be compatible with the shopping cart to integrate with the aggregator, so you may need to set up your shopping cart and aggregator before your payment gateway.

Think of it as an online version of the device in a store where you tap, dip or swipe your card. This service ensures that the payment is processed correctly and securely, whether the customer is using a Visa card, PayPal, or even a cryptocurrency wallet. For online businesses, this means you can accept payments from customers around the world without ever directly handling sensitive financial data.

These include network tokenization Chatonline365 and encryption in accordance to standards like PCI compliance. Different ecommerce platforms often integrate with various payment gateways, each with its own fee structure. Some gateways charge a flat rate per transaction, while others take a percentage of the sale.

It’s crucial to stay on top of the 12 PCI DSS requirements not only to protect your customers but to safeguard your company, too. A payment gateway connects a merchant to their bank or processor. It can be used to initiate e-commerce, point-of-sale, and in-app purchases. If you go for an option like Razorpay, you can complete the entire integration process and deploy it on your website within a few hours.

Choose gateways that work seamlessly with your existing tech stack to avoid operational headaches. Consumers are increasingly aware of online fraud, yet half don’t actively protect themselves. In an increasingly digital world, security must be of the utmost concern.

Transactions can be processed faster with less downtime and more accuracy, helping merchants increase acceptance rates and drive overall growth. For merchants, the main advantages of a hosted gateway are that the PSP takes control of processing the payment, preventing fraud, and maintaining PCI compliance. Hosted gateways are easy to set up and reduce your administrative burden. However, because the customer is redirected to a third party, you lose some control over the buyer journey. Given the sensitivity of the information being transmitted, payment gateways must secure customer and financial data.

Here are eight considerations to bear in mind if your business is choosing or changing a payment gateway. Look for services that use AI to catch suspicious transactions before they become problems. Strong fraud detection stops bad actors while letting legitimate customers complete purchases smoothly.

Customers are the primary participants in the payment gateway ecosystem. They make payments through various methods, including debit or credit cards, net banking, UPI, or online wallets, to purchase goods and services. Primarily used for online transactions, payment gateways facilitate payments on e-commerce websites, mobile apps, and other digital platforms.

When comparing payment gateway providers, look for a service that encrypts data and follows all current international payments and industry compliance regulations. A payment gateway securely processes customer payments by transferring data between the merchant and payment processor. Protecting sensitive card data is a top priority for everyone involved in the transaction lifecycle. Any organization that processes, stores or transmits credit card data is subject to the Payment Card Industry Data Security Standard (PCI DSS).

We help you protect vulnerable data from the moment it enters your system and as it’s transmitted to the card network. With our tokenization solution, TransArmor®, the personal account number (PAN) is replaced with a randomly generated alphanumeric ID, or token, that is meaningless to everyone except the payment processor. This frees you from storing sensitive data in your system and helps minimize PCI scope and liability. Transaction initiationThe customer selects the products or services they wish to purchase on the business’s site or app and proceeds to the checkout page.