When customers see your virtual storefront, you want them to be inspired to buy. When they choose to buy, they need a way to make their payments. That is where payment gateways come into play.
A gateway represents a conduit to get from one place to another. With eCommerce, a gateway allows for the verification and transaction of business via credit cards. A payment gateway is needed if your online business plans to accept payments.
A merchant account is needed whenever you deal with credit cards. A merchant account can be opened at the bank of your choice. This is where money will be transferred once a credit transaction has been verified through the gateway.
There are companies online that operate as payment gateways for merchants to accept credit card payments. You can choose a payment gateway independently. Another option is companies that offer more than one service. Some shopping cart software packages include merchant account and gateway options.
First Things First
You need a merchant bank account and a payment gateway account to get you started. When choosing a bank for the merchant account it is helpful to make sure that they accept payments from the gateway account you will be using. The payment gateway account is a service account that allows you to set up these payments between your site and your merchant account.
Business owners selling online and accepting credit cards also have an Internet merchant account. The funds are transferred here from the payment gateway but they don’t stay here. The funds are transferred, sometimes on a daily basis to another bank account that you, the merchant, designate for business.
The Nuts and Bolts of how it Works
Here is a basic representation of how this process works. While the steps may seem lengthy, everything happens in the space of several seconds.
Payment gateways take the work out of processing credit card payments. Now, you can focus on other aspects of your eCommerce business.