So you have questions about payment gateways? Who doesn’t? There’s no need to feel embarrassed, we know it can be a complicated process. So we’ve put together this list of the most common questions in the industry. Get ready to find the answers you’ve always been looking for.
Frequently Asked Questions About Payment Gateways
Q: What is a payment gateway?
A: It’s a merchant service that authorizes online credit card payment processing. It’s the virtual equal to a physical POS terminal in a store or restaurant. Without it, you won’t be able to process or accept transactions for your online business.
Q: How do payment gateways work?
A: When an online purchase is made, the payment gateway will contact the online store’s acquiring bank, which will contact the issuing bank of the credit card. If the cost of the purchased item was available on the customer’s credit card, then the bank will approve the transaction and the payment gateway will authorize it in order to collect the money from the issuing bank. Otherwise, the bank will decline your request and the transaction will fail to go through. This whole process takes only a few seconds.
Q: What are the different types of payment gateways?
A: There are 6 types of payment gateways:
– Hosted: Easy to setup, but it will redirect your users outside your website’s checkout page.
– Pro/ Self-Hosted: Collects payment details from users at your website then sends them to the gateway.
– API/ Non-Hosted: Allows customers to enter their credit card information directly on your checkout page.
– Local Bank Integration: Also considered as hosted payment gateways.
– Direct Payment Gateway: Supports recurring billing.
– Platform Based Payment Gateway Solutions: Provides a platform to sell digital and physical goods directly from their server.
Q: What is recurring billing?
A: It’s an automated payment for specified goods or services on a prearranged schedule. It requires the merchant to get the cardholder’s permission one time up front, and then continues until the cardholder withdraws permission. It’s suitable for any type of good or service that a customer purchases repeatedly and on a regular basis. Examples include cell phone bills, gym membership fees, and magazine subscriptions.
Q: What are the fees associated with payment gateways?
A: Pricing is different from one payment gateway to another. Generally, they include your setup fees along with a monthly fee and your qualified rate which is charged with every transaction made through a credit card. They may also include reporting and support fees.
Q: How can I process my payments?
A: In order to process payments you will need a merchant account to associate with the payment gateway which integrates with your website or application and facilitates the transactions. The payment gateway handles authorizing and settling the transactions and then deposits the funds into your merchant account.
Q: What is a merchant account?
A: A merchant account is a special kind of bank account for receiving payments from credit and debit cards. This account holds your funds from debit and credit cards for a certain period of time and then transfers them to your regular bank account.
Q: How do I choose my payment gateway?
A: Your chosen payment gateway should offer the type of services your business needs, besides secure transactions.
Q: How can I make sure that the payment gateway I’m choosing is secure enough for my customers’ card details?
A: Security is a huge issue online. That’s why you need to make sure that the payment gateway you’ve chosen meets PCI DSS requirements. And has advanced risk tools with firewalls, intrusion detection, and secure credit card data storage.
Q: What is PCI DSS?
A: The Payment Card Industry Data Security Standard (PCI DSS) is a set of security standards designed to ensure that all companies that accept, process, store or transmit credit card information maintain a secure environment.
Q: To whom does the PCI DSS apply?
A: The PCI DSS applies to any organization, regardless of size or number of transactions, that accepts, transmits or stores any cardholder data.
Q: What is a virtual terminal?
A: Also known as VT, is a service that allows manual processing of credit card transactions online.
Q: Can I switch my payment gateway to another one after signing the contract?
A: Typically you can, but there could be some charges for early termination. So you’ll have to ask about that beforehand and make sure it’s clearly explained in your contract.
Q: Can payment gateways be installed on eCommerce Platform or programming languages?
A: The ideal payment gateway can be installed on any platform or programming language. However, not all payment gateways work that way. So you need to find a payment gateway that integrates with your software.
Q: What about supported currencies, locations, and languages?
A: It depends on the payment gateway’s services. If you have specific requirements for your business, try to find the payment gateway that can fulfill them.
Q: What payment methods can be used through payment gateways?
A: Again, this depends on the payment gateway. Some will accept only credit cards, some may also accept PayPal. So you need to know your customers’ payment preferences in order to provide them with what they need.
Q: What is tokenization?
A: It’s the process of replacing sensitive data with unique identification symbols that retain all the essential information about the data without compromising its security.
Q: What is Omni-Channel?
A: Omni-channel is basically cross-channel. That means ensuring the same online customer experience when using different devices.
Q: What are chargebacks?
A: These are charges that customers dispute on their credit cards for different transactions. When a dispute is made, the merchant reverses the transaction and the customer receives his money back.
We hope you found what you were looking for. If you still have questions about payment gateways, feel free to contact us by filling out this Form and we’ll get back to you as soon as possible.