Things You Need to Know About Electronic Payment Gateways
Online payments have become increasingly popular, leading to the rapid emergence of countless online payment gateways. While electronic payment gateways are widely used, the concept is still relatively new to many users. Let’s explore electronic payment gateways through the following article.
Do You Know What an Electronic Payment Gateway Is?
An electronic payment gateway is a system that connects buyers, sellers, and transaction banks, with the core objective of facilitating quick money transfers right after an online transaction is completed. Simply put, an online payment gateway is an intermediary payment service between buyers, sellers, and banks. For each payment transaction, buyers can use the accounts supported by the online payment gateway to settle various bills quickly and conveniently.
There is no longer a need to visit the bank to transfer money or deposit cash directly. Users of these services just need to confirm their payment via the payment gateway and wait for the system to process it. Nowadays, most sellers integrate payment gateways into their business websites to collect money directly from customers, helping to reduce the risk of order cancellations or failed deliveries.
All providers of electronic payment gateways are referred to as PSPs (Payment Service Providers). These providers allow businesses to use their services without needing to maintain direct connections with the banks. PSPs are designed to handle various payment services that customers utilize.
What Are the Characteristics of an Online Payment Gateway?
An electronic payment gateway is an essential part of the electronic payment processing system, as it is responsible for transmitting customer information to banks for transaction processing.
In the past, POS machines required physical signatures from customers. With the advancement of chip technology, signatures have been replaced with PIN codes entered directly into the payment gateway.
The structure of a payment gateway depends on whether it’s an in-store payment gateway or an online payment gateway.
An online payment gateway will require an application programming interface (API) that allows websites to connect to the payment processing network. Meanwhile, in-store payment gateways use POS devices that connect to the electronic payment processing network through phone lines or the Internet.
Benefits of Using an Electronic Payment Gateway
– Helps customers save time and effort on travel, reducing costs compared to traditional payment methods like utility bills for electricity, water, Internet, etc.
– Minimizes disruptions in product purchases on online websites due to reasons such as physical distance, delayed payments, and more.
– Users can feel secure using fast and efficient payment services with high data security. Electronic payment gateways also provide detailed payment histories for customers, serving as a legal basis to resolve any future disputes.
– Electronic payment gateways simplify online transactions, making it easier to purchase goods, book entertainment services, or reserve rooms.
