Business and Finance Blog

Gateway

The foundation of e-commerce is primarily based on the effective transfer of funds from customers to merchants. If you are engaged in online business, you surely understand the importance of the gateway and how it enables the free flow of financial transactions, receiving secure payments from customers based in different parts of the world. Without a gateway, online business will crumble down to earth. With all these arise some common questions that need to be addressed. Here are some too frequently asked questions (FAQs) about the gateway:

What is a Payment Gateway?

A payment gateway is a technology-driven system used for authorising, collecting, payment processing, storing card details on the behalf of the merchants. Its primary function is to provide a safe and secure channel for receiving and processing required payments through credit cards and debit cards. Moreover, gateways also allow merchants to send and receive payments online on a real-time basis, through mobile or via integrated API. It offers a reliable bridge between the different stages of payment.

How Does a Payment Gateway Work?

When a customer proceeds to check out and enters payment details in the application (online, phone or integrated software), the gateway requests payment from the issuing bank (customer’s bank), verifying both the authenticity of the account and availability of required funds. After the transaction is validated or confirmed, the gateway vendor sends requests for the fund transfer and deposits the funds into the merchant’s account. All this process takes place within seconds on a real-time basis.

How Much Does a Payment Gateway Cost?

The cost of a gateway varies from company to company, so it is essential to do comprehensive research. Some gateway companies may ask for a one-time setup fee, while others may ask for a maintenance fee every month. However, it doesn’t matter much, but it is important to look out for the hidden charges and other terms & conditions that may impact significantly on the overall price.

What is a Merchant Account?

A merchant account acts as a holding bank account where all the relevant information about the payment process is collected. Once the payment is validated, funds are safely transferred to a business bank account.

Is Your Payment Gateway Secure?

The gateway stores and transfers sensitive customer details, so it must be very concerned about the requisite security features. Generally, the modern gateway is highly secured and in compliance with standard security measures.

How to Choose a Reliable Gateway?

The market has flourished with numerous gateway vendors, not all are credible in an equal sense. Consider these vital points while choosing a reliable gateway:

• Accurate and seamless payment flow
• Safe and secure
• Ensure effective financial transactions
• Compliance with standard security measures (SSL and PCI DSS)
• Agreeable terms and conditions
• Cost-effective and no hidden charges.

Do You Need a Payment Gateway?

Well, it is up to your personal choice. There are no strict guidelines or mandated law that one has to go opt for a gateway. However, having a gateway helps in increasing the efficiency of the business, you can give real-time feedback and the status of the payment to your customers. Moreover, a reliable gateway helps to increase automation and lessens the manual effort to facilitate the payment process.

Now you are aware of the fundamental workings of the payment gateway and hopefully, some of your basic doubts have been answered. Choosing a suitable gateway can change the course of your business and opens the door for numerous opportunities to prosper your business. Choose Cashfree’s payment gateway that complies with PCI DSS (Payment Card Industry Data Security Standard) and ensures the overall protection of card details.