subject: Ecommerce Payment Gateways [print this page] The primary reason why you set up a virtual storefront is to make a sale. When visitors see your products, you want them to make a purchase. Services offered by payment gateways are very useful when customers need to pay you for their purchases.
A gateway serves as a channel that can bring a thing from one place to another. When doing eCommerce, a gateway plays an integral role in making verifications and allowing credit card transactions to come through. A payment gateway is an essential component of any online business.
For businesses to be able to accept credit card payments, they need to have a merchant account. Business owners can open a merchant account in the bank where they do their banking transactions. This type of account is where revenue derived from credit card transactions will be transferred after verification by the gateway.
A number of online companies offer payment gateway services for businesses that accept credit card payments. Business owners can choose the payment gateway provider of their choice. However, there are companies that offer a combination of services such as those that offer software packages that include a merchant account and a gateway service option as well.
Setting up the Necessary Accounts
The first thing that you need to do to get started is to open a merchant bank account and payment gateway account. When opening a merchant bank account, make sure that you choose a bank that will accept funds from your payment gateway account. This type of account lets you set up payments between your eCommerce site and your merchant bank account.
Online businesses that accept credit card payments should also have an Internet merchant account. All funds received from credit card payments are transferred from the payment gateway to this account. However, funds only stay in this account temporarily as they will be transferred to another account that a merchant designates beforehand. Transfers are done regularly and automatically.
How Things Work
Below is a step by step account of the process involved in each transaction. There may be a lot of steps involved but remember all these happen in the span of just several seconds.
1. Customers will go to your site and click on a product or products that they wish to purchase. When they are done with their shopping, they will be directed to the checkout page to pay for the products. In this step, they will confirm that they wish to buy the item/s that they have chosen and they will indicate the form of payment that they will use.
2. As soon as payment is done, the transaction will be forwarded to the payment gateway that you have chosen. Through this service, the transaction will be sent to your bank's processor.
3. Then the transaction will go through the credit card's network which will then send it to the bank that issued your customer's credit card.
4. If your customer's credit limit is enough to pay for all the items, then transaction will be approved. Then it will go through the same path that it has taken.
5. Once the payment gateway gets the message that the transaction is approved, it will inform the customer through your site. Then it will also send information to you, the merchant.
Payment gateways are an indispensable tool if you wish to accept credit card payments in your site. It will free you of the hassle of processing credit card payments manually allowing you to concentrate on the other aspects of your online business.
by: Jack Heape
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