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A Merchant’s Guide to Online Payment Gateways

December 29, 2020

It will be an understatement to say that customers have warmed up to eCommerce and online payment methods. The rapidly-evolving market throws a lot of opportunities to merchants to expand their business. The vast volume of transactions done online has paved the way for diverse online payment methods, which are now accessible to merchants. Too many options, however, could be confusing to even the most experienced eCommerce merchant. It is crucial to understand the basic concept of online payment gateways to succeed in your business.

Online Payment Gateway

Payment gateways are vital for eCommerce merchants as they help them accept online financial transactions and manage their cash flow. It works as a middleman between the merchant and the customer. It ensures that the payment is made correctly and securely. It is a technology that captures and validates the customers’ card details, ensures the availability of funds, and eventually enables the merchant to receive the payment. With the availability of innovative technology, online payment gateways in the Philippines or Indonesia can simplify how merchants integrate their software and equip the payment ecosystem to run smoothly.

Online Payment Gateway: Why Do We Need a Middleman?

In a brick and motor shop, the customer’s credit card is swiped on a POS terminal to process payment. In a card-not-present transaction, swiping is not possible, and you need to rely on the information that the customer enters on the payment page. The risk of fraud is high in such situations. It is easy for fraudsters to have the card data you process, resulting in exposure to fraud and chargebacks. They may identify ways to initiate illegitimate transactions that can end up damaging your brand’s reputation. Payment gateways play a pivotal role here. An online payment gateway acts as a gatekeeper of your customers’ payment data. As an online transaction is made, the merchant’s information is relayed to the issuing bank in encryption. It thus keeps unwanted threats away from sensitive data. It also protects the merchants from insufficient funds, expired cards, exceeding credit limits, and closed funds. Therefore, online payment gateways in the Philippines and elsewhere keep the transactions system safe and secure.

Online Payment Gateway: How Does it Work?

Normally, your customer adds the product into the shopping cart and then proceeds to the payment page to make the payment. The customer enters their card details, including card number, cardholder’s name, and CVV number. The information is securely passed onto the payment gateway based on the integrations. In the Philippines or Indonesia, online payment gateways offer you different options for integrations on the payment page. It includes a hosted payment page and direct API. In a hosted payment page, the customers are redirected when they are ready to checkout. The payment gateway receives the transaction data before it is passed to the acquirer. It reduces online merchants’ burden if you do not collect and store the cardholders’ data on your server. In contrast, the direct API method enables the merchants to process the credit card and check the transactions in real-time through solutions like shopping carts, web pages, mobile applications, or billing software.

Multi-Currency Payment Gateway
As eCommerce allowed merchants to expand their businesses beyond geographical limits, you need to consider the currency issues in your international markets. A multi-currency payment gateway allows you to accept payments in various currencies from your customers across the globe. In the Philippines or Indonesia, online payment gateways have options to allow multiple currency transactions so that international customers can pay in their currency of choice. The services include dynamic currency conversions and simplified authorization and settlement processes for international payments.