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What is the payment gateway definition?

Monday, 09 Aug, 2021

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In recent years, e-commerce has emerged as a critical component of the global retail framework. Since the advent of the internet, the retail landscape, like many other industries, has undergone significant transformation, and thanks to the ongoing digitalization of modern life, consumers from virtually every country now benefit from the advantages of online transactions. Due to the needs of online payments, there’s the rise in the payment gateway providers everywhere as well as the growth of Internet's rapid expansion. They are in charge of a payment's security and sensitive transactional datas, as well as processing them into a virtual station or an E-commerce website. So, what is the exact payment gateway definition?

1. The Payment Gateway Definition

The recent growth of online payments demonstrates the importance of payment gateways for the business. Payment gateways are services that process credit/debit card transactions for the company. They benefit the company by ensuring safe and seamless transactions and reducing losses associated with pending payments.

In simple terms, a payment gateway is a network that allows your customers to transfer funds to you. Payment gateways are very similar to the point-of-sale terminals found in most physical stores. Customers and businesses must collaborate to complete a transaction when using a payment gateway.

Key takeaways of the payment gateway

  • Payment gateways are interfaces that collect payment information from customers.
  • Payment gateways are point-of-sale (POS) terminals that accept credit/debit card information via card or smartphone in physical stores.
  • Payment gateways are the "checkout" portals that online stores use to enter credit/debit card information or credentials for services like PayCEC.
  • Payment gateways differ from payment processors in that they collect payments on behalf of merchants using customer information.
  • There are also payment gateways that allow for cryptocurrency payments.

The key factors which relate to online payments

  • The merchant
  • The customers
  • The issuing bank
  • The acquiring bank

The payment gateway definition.

The payment gateway definition.

2. How payment gateway works?

When it comes to the operation of an online payment gateway, it always follows a payment settlement procedure. When a customer orders a service or product from a merchant who accepts payments through a payment gateway, this happens. The payment gateway goes through a series of steps, beginning with entering the card information and ending with payment being deposited into the merchant's account and settling.

Due to the payment gateway definition, it does the following steps as how payment gateway works:

  • It is linked to the merchant account. It provides companies with one or more options for integrating online card processing with their merchant business account.
  • It keeps track of the payment information for each customer's transaction. Using the tools provided by the payment gateway provider, the merchant sends information about their customers to the payment gateway. To ensure the security of the payment information, the gateway encrypts it during transmission.
  • It sends that information to a payment processor or an acquiring bank. The acquiring bank takes over at this point. Before sending the transaction to the card networks, it performs some fraud screenings.
  • It sends an approval or decline notification to the merchant. Based on their yes or no response, the merchant sends a confirmation or rejection notification to their customers. They may request that their customers pay in another way.

The payment gateway serves as an intermediate between the customer and the merchant, ensuring that the transaction is completed securely and quickly. Merchants may find it easier to integrate the necessary software with the help of an online payment gateway. As a middleman during payment processing, the gateway manages the customer's sensitive card details between the acquirer and the merchant.

Do you know how the payment gateway works?

Do you know how the payment gateway works?

3. Advantages of payment gateway

Convenience

Customers have the ability to shop and pay at any time and from any location. One of the most noticeable benefits of the online payment gateway platform is that it makes electronic payments more convenient and simple than ever before. Furthermore, unlike in physical stores, there is no time constraint during the day.

Improved buying decisions

Approximately half of all e-commerce spending is made on the spur of the moment. To encourage shoppers to buy more freely and without barriers, the payment platform is included with the digital platform. Customers can make final decisions without being constrained by time or location, as they would in a physical store; this is referred to as impulsive buying.

Developed customer base

Merchants can now connect with anyone, which was previously impossible with physical establishments. It boosts the merchant business's sales as well as its overall performance/operation at this point. Furthermore, it broadens the customer base.

Payment verification

Because the data center sends payment confirmations to merchants every time a purchase is processed or completed, merchants can easily manage their businesses. The merchants will then decide what steps to take next.

Enhanced security

The Payment Card Industry Data Security Standard (PCI DSS) is a set of rules that must be followed by any business that processes, stores, or transmits cardholder information. It is regarded as the most important practice in E-commerce for creating a secure environment for various types of information.

Recurred billing

Payments are made with a single click, customers of merchants have multiple options for recurring payments, and more solutions are being developed to make payment processes more convenient and faster. It all depends on the needs of the customer. This feature enables shoppers to experience unstoppable services while merchants save cost regarding customer care and remind service.

Integration

It provides several options for integrating online card processing capabilities with their merchant business account. Several distinguishing features explain transaction types and encourage merchants to integrate a payment gateway into their websites.

Fraud detection

Everything revolves around the merchant and the information provided by their customers. Nowadays, most payment gateway providers perform a function that includes highly flexible fraud screening rules that can be fine-tuned to meet the needs of merchant businesses. This service helps merchants maximize revenue by automating and streamlining scam operations.

Various available payment methods

As can be seen, the vast majority of local payment gateway service providers now accept a wide range of payment cards, including credit and debit cards. Aside from that, it depends on which country accepts Visa, such as Asians, whereas in the UK (Europe), they tend to accept Mastercards, and in North America, they prefer AMEX and Mastercards.

Joining as many markets or as many different merchants as possible increases the company's competitiveness while also preventing them from losing their own loyal customers. Merchants tend to approach more customers by providing a variety of payment options, allowing them to have more positive shopping experiences.

Read more: Payment gateway advantages

What are advantages of payment gateway?

 

What are advantages of payment gateway?

4. Why do we need payment gateway?

Reliability

From the merchant's perspective, especially given the high expectations for security, they want their customers to completely rely on them. Knowing and understanding those demands, every payment gateway provider focuses on developing and improving reliability.

Online integration

Knowing and understanding those merchant’s expectations, many global payment gateway providers, allow merchants to reach or approach their sites easily.

 

By integrating online payments, like PayCEC, we provide opportunities for merchants. Merchants can visit our for more information and sign up using simple and easy procedures. There is customer service in the form of our Relationship Managers, who are available 24 hours a day, 7 days a week to assist with those steps in a timely manner. It only takes a short time for merchants to successfully open an account.

Recurring billing tools

Many businesses now sell products on a subscription basis. Finding a payment gateway that can handle automated billing, payment reminders, flexible billing plans, and automatically updating shoppers' subscription payment details will make your life easier.

Fraud Detection

​​When an online business accepts a payment, it exposes itself to the risk of being hacked. If your fraud level spirals out of control, your business will suffer as a result of chargeback fees and fines, lost merchandise, and reputational damage. Finding a payment gateway with strong fraud detection and prevention technologies will help.

Understanding of why do we need payment gateway?

Understanding of why do we need payment gateway?

5. How to register a payment gateway for your business?

In PayCEC, we provide our customers an online payment gateway which brings quicker online payment processing. Let's give us a try, here are the steps that help you to set up a multiple currency mẻchant account, including only 4 steps:

  • Enter information
  • Document Submission
  • Integration Support
  • Go Live

Learn more

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About us

PayCEC was established in response to the growing need of businesses to accept online payments more quickly and easily. In the new media era, our payment flow has evolved to work seamlessly and effectively across all platforms and devices. We pride ourselves on combining superior technology with first-class customer service.

PayCEC is a truly global payments platform that not only allows customers to get paid but also withdraws funds to their Business accounts in various currencies.

We have created an open and secure payments ecosystem that people and businesses choose to securely transact with each other online and on mobile devices.

PayCEC Team

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We are honored to serve as your reliable business partner and financial service provider in the industry and other business-related services. With the help of our professional staff, to help merchants to achieve their goals for the development and expansion of the international business market.

Our payment flow has developed in the e-commerce world to perform seamlessly and effectively across all platforms and devices. We take pleasure in combining technology with customer service, to solve your concerns at the moment.

PayCEC is a fully worldwide payment network that not only allows merchants to be paid immediately and securely, but also allows them to withdraw money in multiple currencies to their company accounts.

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