what is a payment gateway?

Everything you need to know about a Payment Gateway.

If you start an online business and want to accept payments online, a payment gateway is something that you will need. They might sound a bit out of your box by now, just continue reading I assure it is not that complex as it sounds. Here’s a brief about what payment gateway is, how it works and how can you get started with a payment gateway for your business.
What is a Payment Gateway?
The payment gateway is a service that is responsible for the authorization of your card details and then transfers the details to the payment processors. You receive a confirmation for your transaction which is again handled by a payment gateway. Sounds tough? Well in simple words, Payment Gateway act as a bridge between the transaction that the customer wants to make and the payment processor. Your website or mobile application cannot directly connect with the bank for security reasons thus a payment gateway is required. Thus, Payment gateway is the mode of sales by which you can charge your customers who want to buy your products online.
What is the role of the Payment Gateway?
Payment Gateway service is the same as the POS machine where you can swipe a card to make an online payment, in Payment Gateway service customer enters their card details online to make a payment for your products.
The main role of the payment gateway is to authorize the transaction you and your customers. Without a payment gateway approving the transaction you will not receive your money.
Do you need to have a Payment Gateway?

online payment
It completely depends on your business requirements, it is very important to analyze your business requirement before integrating a payment gateway. If you run an e-commerce website and want to start accepting payments online then you definitely need a payment gateway service as there is no other way to accept any kind of online payment without having a payment gateway.
Make a note that the transaction processed by a payment gateway is a card, not present transactions which means that the merchant relies on the credit card information that is provided by the customer.
While making a card-not-present transaction, the data is not run on the EMV chip in the card unlike POS machine transactions so, the risk of fraud increases. Thus, these transactions can charge you higher than a card-present transaction.

Related Post: How to does a Payment Gateway charge?

How does a Payment Gateway work?
From a customer’s view, the payment gateway is quite straightforward where the customer visits your website, adds products to the cart and then checks out making the payment for desired products via a payment gateway by adding the card details.
But it is a bit more complex behind the scenes.
The gateway processes in the following steps:
1. The customer enters the card details and makes payment for the desired products on your website. This transaction is a card-not-present transaction for which the charges are quite high for security. This information is encrypted and sent on its way.
2. The encrypted data is sent to the payment processor which the company that processes the payments.
3. The payment processor sends the data to credit card associations like Visa or Master card. These associations charge an interchange fee for each transaction.
4. Now the transaction is either approved or declined for which the card firstly needs to be valid and have enough funds.
5. Once the transaction is authorized the issuing bank transmits the data to the payment processing parties.
6. The execution of all the above steps takes just a second but it might take a couple of hours for the amount to be reflected in your account.

Related Post: How to integrate a Payment Gateway?

How to choose the right payment gateway for your website?
There are different ways of payment gateway integration,
Hosted Gateway: Hosted method is a third party integration method and the customers required to leave the current page and are directed to the payment page to complete the transaction.
The drawback of this gateway is that it might lower your conversion rate as it directs the customer to another page to complete the transaction. Thus, customers will not trust such a payment gateway.
Non-Hosted method: This payment gateway allows the customer to make a transaction without having to leave the current page and the integration of these payment gateways can be done through API.
The drawback is the maintenance of the payment gateway infrastructure also, before integration of this payment gateway you need to be PCI DSS compliance as all the client details are stored on your server.
Now, you are aware of the differences in payment gateway integration you can choose your payment gateway by analyzing your business requirements as different payment gateway have different features like auto-fill OTP and more. Also, the payment gateway fees, multiple payment modes, multi-currency support, PCI-DSS compliance, fraud prevention are some of the points to be considered before integrating a payment gateway.
Still, if you are confused as to which payment gateway to choose from, visit Digital Payment Guru to find the top payment gateways at best market rates. Digital Payment Guru also helps you find the best payment gateway for your business by analyzing your business requirements.

How is the payment gateway beneficial for B2B companies?

B2B companies are switching to digital payments to simplify their daily business operations. B2b companies have a greater liking for digital payments over traditional payments.

There are still several companies that prefer traditional methods through checks and cash, where digital payment methods have made online payments easy with various payment modes like UPI, Netbanking, Credit/Debit cards.

How B2B companies transaction work?

Well, a transaction is called B2B when one of the business acts a customer to other business, the transaction can involve services like development, email tools and more or can involve parts and units. Payment gateway became necessary for B2B companies with the rise of digital payments. With the growing business, managing payments of vendors and suppliers through cash and check becomes a difficult task.

Why should B2B companies have a payment gateway?

During the purchase of supplies and services businesses usually, prefer to make bulk payments. They look out for multiple payment modes and want to be sure their payment is secure. They want to have a track of these payments and also they want to trust their business partners.

Well, all of the above-mentioned things are not possible with traditional payments, in fact, there are more cons in traditional payment method like the check gets bounced, cash is difficult during bulk transactions. Thus, having a payment gateway simplifies these problems providing complete transactions and providing multiple payment modes which can increase customer footfall for the B2B industry.

Related Post:Key Benefits Of Payment Gateway Integration for Business

Benefits of B2B companies having a payment gateway.

In business, your Time is Money and payment gateway handles both these entities. The ease of payments with lesser errors enables B2B companies to accelerate their transactions from vendors to suppliers. Following are the benefits of having a payment gateway.

  1. Saves Time and Efforts by providing payment button by clicking on which payments can be made thus eliminating the efforts of handling paper checks.Payment Button
  2. Guarantees the payment from the buyer to the seller.
  3. Trackable goods and services and payment notifications.
  4. All online payments are secure giving the seller confidence to do business with new parties.
  5. Faster payment collection with guaranteed to reach clients at a specific period.
  6. Hassle-free payments by eliminating the security risks associated with cash payment.

Why Switch to Digital Payments from Traditional Payments?

In traditional payments dealing with cash and checks can get tedious at times, also drawback is to physically mail the invoices to the clients which consume a lot of time and effort. Payment gateways eliminate this process by providing payment automation wherein your clients get a notification for payments they make thus avoiding the hassle of managing cash, checks and physically sending the emails.

Related Post: Digital Payment Gateway for Successful E-Commerce Business

How B2B companies use payment gateways?

online payment

  1. Integrate a payment gateway into the website: Many companies integrate payment gateway on their website allowing the customers to make a purchase from the website. This also allows them to choose from the various mode of payments like credit/debit card, Netbanking, UPI. Most business also provides NEFT.
  2. Add bank details on website or email bank details: Many companies provide bank details on their website or in pricing section which added into account to transfer the amount. Some companies email their client the bank details to receive payments.
  3. Payment Links: This is the easiest way of collecting the payments, B2B companies share the payment link on social media platforms like Facebook, Whatsapp, SMS. Customer can click on this link and make payments. Payment also offers customers to use multiple payment modes to make payment.
  4. Recurring Payment: B2B companies provide recurring payment set up for their client so they do not need to worry about paying at regular intervals. Recurring payments are basically instructions send to the bank to debit the amount at a certain date.

How Digital Payment Guru facilitates B2B companies?

Digital Payment Guru provides top payment gateways like PayPal, PayU, Instamojo, Atom and Paytm at best prices compared to market rates. We help you choose the best payment gateway according to your business by analyzing your business needs.