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, Author: Jacqueline

What is a payment gateway?

If you’re looking to sell online, you’re probably going to need the help of a payment gateway, regardless of the size of your business.

It sounds complicated but it’s basically the technology that allows merchants to accept payments securely from customers for purchases – and most commonly using debit or credit cards.

A payment gateway, like Fondy, essentially verifies your customers’ billing information, authorises funds for each customer’s payment method, approves requests, allows your business to issue a confirmation number and also ensures that you receive payment.

A gateway can be used for both e-commerce transactions and for those carried out in physical stores. In a shop you’ll have seen point-of-sale machines, often called Chip & PIN terminals, which are used for payments. 

And it’s the very same on the web, but instead it’s called a virtual terminal – a secure page which is usually logged into and where a customer’s card payment can be processed without the need for them to be present.

A straightforward process

The process from the customer choosing their item and paying for it to you, the merchant, getting paid, is relatively straightforward:

  1. Your customer goes through the checkout process to purchase their item.
  2. You, the merchant, transfer the order information to the relevant payment gateway. The customer selects their preferred payment method (Paypal, credit card, debit card, bank payment etc.).
  3. Their data is encrypted during transmission for security purposes.
  4. A transaction request is sent to the issuing bank for authorisation.
  5. During the authorisation process, the transaction will be either accepted or declined. This depends on whether the funds are available in the customer’s account, issuing bank or credit card provider.
  6. The payment gateway notifies you, the merchant, of the transaction status.
  7. The payment is settled between the bank and the payment gateway which then delivers the money to you.
  8. You, as the merchant, will pay a processing fee for this.

Put your customers first

There are many payment gateways to choose from, like Fondy, but make sure that you consider all the needs of your customers.

Think about offering multiple payment methods and the ability to accept most types of currencies. Think also about the needs of your business – such as offering recurring payments which saves both you and your customers time and effort.

And most importantly you need to put enhanced security first and foremost as this will offer your customers an excellent shopping experience and peace of mind guaranteeing return visits and increased revenue.

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