An online payment gateway is a system for accepting consumer payments in electronic form over the internet and mobile devices. They are mainly found in e-commerce, online auctions, crowdfunding websites, and other hindi websites where customers can submit credit card or bank account information for payment.
In other words, an online payment gateway is a way to receive payments for the products or services you sell online. This article will give an overview of what is a payment gateway and the benefits of this particular type of account.
What Is an Online Payment Gateway?
Talking about payment gateway definition is a service that provides tools and technology companies need to process electronic commerce transactions securely over the web and mobile apps. It’s one of three elements that make up an integrated e-commerce solution, along with merchant accounts and banking relationships.
Solidgate is a unified payment processing platform that provides payment gateway services for different types of online businesses and gives companies a way to accept credit cards, debit cards, and other forms of digital payments from customers anytime and transfer their payments into the merchant’s bank account. It is a completely integrated payments API with solutions for online merchants, subscription businesses, software platforms, etc.
This protected and fast-adjustable payment solution features 150 alternative payment methods for your international business and counting.
Payment Gateways vs. Merchant Accounts
While a merchant account is simply the account that makes it easier to accept credit card payments and receive the profits, an online payment gateway actually handles the entire process of taking payment information and processing it until the money reaches a merchant account. The type of merchant account you need depends on your business needs. Depending on your situation, you can choose between an individual merchant account or a business one.
A payment gateway takes all the credit card information that comes through your website and connects it to a specific customer’s order when they pay, so you get paid for that sale automatically.
Functions Each Payment Gateway Performs
You will see three main payment gateway functions: it authorizes the transaction, captures the transaction, and settles the transaction.
Authorization
The payment gateway will first authorize the transaction, which takes place after the event has been created and sent to the processor via an API or other form of communication. The authorization process ensures that the cardholder has sufficient funds in their account to pay for their purchase, that the charge won’t overdraw their account, and that it will go through without being rejected by the issuing bank.
Capture
The payment gateway will then capture the transaction, which is usually done through a secure connection that is only visible to the processor and the credit card company. This stage means you may already ship goods to a customer because money is already captured.
Settlement
This step transfers all of your merchant funds from your merchant account to your bank’s account. Once this process is complete and verified by either you or the credit card company, you can use that money for whatever purpose you see fit.
Three Types of Payment Gateways
There are three global payment gateways that an online business owner will typically interact with. Some may have more than one, but these three can get the bulk of your business’ payments.
Hosted Payment Gateways
A hosted payment gateway is a merchant account that is 100% digital and is hosted by the provider. The hosting service works by acting as an intermediary between the business providing a service and its customers. The business’s website uses technology to redirect customers’ payments for goods or services to the hosted payment gateway, which then takes care of passing that information along to the bank or other account where money will be deposited.
Self-Hosted Payment Gateways
Self-hosted payment gateways are software programs that can be downloaded and installed on your own computer or server in order to process credit card transactions securely over the internet and mobile devices. They work on their own server and pass the information to your host, who then passes it to your credit card processor.
API Hosted Payment Gateways
API-hosted payment gateways are software applications that are also hosted on their own server and allow merchants to receive payments via the internet for goods and services rather than using a host merchant account. These payments are made via HTTPS queries or APIs. To use this type of payment gateway, merchants must have an SSL security certificate on their site to provide maximum customer data protection.
The Bottom Line
Online payment gateway service providers create a digital bridge between businesses and their customers, allowing customers to make fast, secure purchases with the click of a button. This enables merchants to provide better customer service and get paid for each sale. In order for this to occur, online businesses need a payment gateway that can process payments quickly, securely, and transparently.