Given the rise of tech startups and businesses keeping up with the online world, a new concern has been going around boardrooms and meetings: “We need a Payment Gateway.”
Out of these discussions, the fundamental question, “What exactly is a Payment Gateway, and why do we need one?” needs to be addressed.
Understanding Payment Gateways
There’s still a lot of limited and vague ideas surrounding payment gateways. One example is that it’s simply known as a credit card payment platform. Its relationship between banks, merchants, and customers, are seldom explored.
Understanding how a payment gateway works is essential to the business. Learning more about its overall functions sets the right course for business development. It’s called a ‘gateway’ for a reason.
A Merchant Service Package
Payment gateways offer two (2) types of services. One is technical, the other is business. The technical side maintains the back-end technology for online payments. The business side provides merchant services. These services range from integration to banks and financial institutions, down to providing a central database for sales reports.
Not limited to credit card acceptance, its omni-channel platform connects merchants to alternative payment methods with the likes of GCash, PayMaya, and Dragonpay in the country. Merchants who accept international transactions can easily integrate to more payment methods and currencies, upon request.
A Payment Gateway has three major components:
- Functionality – it comes with a centralized platform that allows easier merchant onboarding and accounts management. Businesses can do different functions at the same time.
These include integrating a new merchant, and even conducting administrative and call center operations. These functions are provided under one secure platform that’s able to support multi-currencies, alternative payment methods, and processing of high volume transactions.
- Comprehensive Risk Management – ties with banks and financial institutions worldwide. These international, third-party connections provide reliable and innovative risk management features.
One by-product of third-party connections is the global consumer credit and fraud database. This advanced feature greatly reduces fraudulent transactions.
- Payment Solutions Network – local merchants have no problem offering only Visa and MasterCard. But those planning to accept international transactions will need more types of payment solutions.
This is the advantage of connecting to an omni-channel platform. Merchants can connect to different payment methods as needed. Globalization demands that businesses keep current and innovate, which is exactly what these payment solutions are all about.
Put simply, a payment gateway is a bundle of online merchant services. They save businesses time and money, so they can focus on what they know best - management of products and services, and monitoring revenues.
Why Do Businesses Need Payment Gateways?
These merchant services guarantee efficiency, ease of operations, and state-of-the-art security. All the technical and business aspects of running an online business are taken care of.
One example is the mandatory PCI DSS compliance. All businesses processing and storing card data must be in compliance with the Payment Card Industry Data Security Standard (PCI DSS). This can get too technical and tedious, but connecting to a PCI-compliant provider will get this processed smoothly.
Businesses need a global platform. Not solely dependent on banks, customer needs must be met with in-demand alternative payment methods. If the business expands to international market, they can easily connect to their preferred financial institutions.
In terms of online payments acceptance, comprehensive risk management is the business’ solid foundation. With the risks involved in setting up an online business, merchants are provided with reliable, up-to-date security features to avoid fraud and minimize chargebacks.
The demand for a sophisticated online payment platform is growing. Access to different payment methods, global risk management, and a wide network of banks and financial institutions are available in one streamlined platform. More important than looking at costs, businesses must first understand and learn more about how to choose the right Payment Gateway partner to help grow their business.