Payment Gateways 101

Posted by: Shane on Friday 16th August 2013 | Back to Blog

This is the first in a series of entries we will be making to the blog that covers some of the basics when it comes to getting your online business up and running. Our first entry is the exciting world of payment gateways!

Introduction.

With the ecommerce market in full swing, its critical that your business has the most efficient and secure way possible to process your credit card payments from your customers. Payment Gateways, such as eWay and Securepay, provide credit card payment facilities for your site, so you can process credit card payments in realtime and avoid having to keep the credit card on your site. Payments made to the payment gateways are deposited straight into your merchant bank account, so its often a quicker way to get paid as well.

So why use a payment gateway?

1. Its secure. Having a payment gateway eliminates one of your businesses biggest risks, the need to store credit card information. With a payment gateway, there is no reason to store the credit card in your infrastructure, ensuring that your risk is mititgated.

2. Get paid quicker. You can get paid much quicker than a manual process because the payment gateway provider forwards your funds directly into your merchant account.

Cant I use my bank?

Yes, you can as most banks offer direct payment gateways. Pay careful attention to this though as your website application needs to support the payment gateway. This means that your site needs to support Westpac, St George or whoever your Australian Financial institute is. The issue is that most ecommerce applications do not have direct support, so they need to be custom developed. This can often exceed the cost compared to using a 3rd party (and supported) payment gateway provider like eWay or Securepay - which are very well supported by both developers and off the shelf applications.

But dont I need the clients credit card for refunds or any future purchases?

Refunds are handled by the payment gateway provider, so they can offer refunds to the customers card with minimal fuss. For future payments, merchants have some options...

1. Merchants selling product generally dont need recurring payments.

Most merchants who are selling a product dont need to store the credit card, since its all point of sale. At checkout, when a user enters their credit card details, the ecommerce platform will send the credit card info straight to the payment gateway for processing.

2. If you do need to bill recurring, use a payment token!

If you offer a product or service that requires ongoing payment, make sure you use a payment token instead of storing the credit card. Most major payment gateways offer some sort of tokenised system, allowing you to process the payments when needed, without storing the customers credit card. The process is the same, but instead of storing and sending the customers actual credit card, the payment gateway supplies a unique token that you use to process payments instead. The implementation varies between gateways as well so be sure to check with the gateway provider to make sure they way your wanting to bill suits the service provided.

Help!

If you need assistance in setting up a payment gateway for your next project, contact us today for advise or leave a comment below.


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