When customers make a purchase online, it’s still a lot like buying something in a physical store in some ways. Your customer selects your item, puts it in their shopping cart, goes to the cashier, makes their payment, and receives their item. The main difference with virtual shopping is, of course, that they don’t need to physically be in the shop. Another typical difference is that their purchase will probably be sent in the post, by drone, or through a courier delivery service, although some items bought online don’t need to be shipped, some items purchased in person do need to be shipped or delivered. All the others steps are essentially the same, from the customer’s point of view. But none of that would be possible without your payment gateway.
Payment gateway vs Merchant account
So what is a payment gateway? To start with, in order to accept credit cards, you need to use a merchant account. With merchant account, using a virtual terminal or a physical terminal, you can accept credit cards, and the transaction amount (minus any fees) will be automatically deposited into your account. But what if the transaction occurs online, where you’re not there to swipe a credit card or enter their information? That’s where your payment gateway comes in.
The payment gateway connects the Internet to the banking network. When your customer enters their payment information on your website, the payment gateway transmits that information to both the cardholder’s bank and your bank via the banking network, enabling the transaction to proceed. The gateway then immediately reports the results of the transaction, letting you and your customer know that the transaction was a success–or that the transaction didn’t go through, so that the customer can double-check their payment information and try again.
How do you get a payment gateway?
Typically a payment gateway will be provided for you by your merchant account provider when you sign up for your merchant account with a merchant account provider, as long as you let your provider know that you will be accepting payments online. But not all merchant providers necessarily provide this service, so make sure to check before you sign up for your merchant account, if this is something you will need!
For more information on the difference between a merchant account and a payment gateway, or to sign up for a merchant account with a payment gateway, please call (888) 924-2743 or go to Charge.com.