How to Collect Payments Online with a Payment Gateway

A payment gateway is used to validate the credit card details of a customer in a secure manner. It is often considered the equivalent of a point of sale terminal in a brick and mortar store. The gateway will pass the customer’s financial information to the merchant’s bank. It will then confirm that the charge has been approved, and submit the charge for settlement, at which point the merchant and cardholder ill be informed of the status of the payment, and payment would then be deduced from the buyer’s account into the merchant’s account, if a transaction was approved.

It’s important to note that a payment gateway is different from a merchant account. If you plan on selling through the internet by accepting credit cards, you will need both. The gateway is there to approve or decline a transaction, while a merchant account stores all the money received from a transaction.

Choosing the right payment gateway

There are several factors to take into consideration when choosing a payment gateway or a full service payment provider.

The first (and sometimes the only) consideration is what payment gateway is compatible with your merchant account and with your software, such as your shopping cart software.

You may also want to take into consideration the amount of time it takes for a gateway to deliver your funds. Typically, it takes just a few days, but timings can vary between different providers. Some gateways may hold onto the funds, or a percentage, for up to 30 days, while others pay out at regular intervals.

If you plan to do business with international clients, you should confirm that your gateway accepts international and multi-currency payments, and whether or not this involves any additional fees.

Another important concern is security. A good gateway will be level 1 compliant with the PCI DSS (Payment Card Industry Data Security Standard). Gateways can come with many other security features such as tokenization, fraud protection and screening tools, and others. You also want to look at the gateway’s support service, which can help make your experience much better.

For more information about payment gateways and how to find the best one suited for your business, or to sign up for a merchant account, please call (888) 924-2743 or go to



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