Starting an Online Shop - Brief Introduction of Payment Gateway Features
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What are the first steps of starting an online shop? Sure - investing in a visually appealing and user-friendly website design is crucial, but paramount to this is creating a seamless shopping experience for your customers. Establishing a convenient and secure payment gateway is an essential part of any smooth transaction.
What is a Payment Gateway?
A payment gateway collects and verifies a customer’s credit card information, passes this verified information to the payment processor, and manages the fund transfer requests between the merchant, the credit card company, and the bank so that the online shop can receive payments from the customer1. Currently, some payment gateways offer both services at the same time1. From the time the buyer adds a product to the shopping cart, through checkout to payment transfer, the following stakeholders are involved in the online shop owner’s payment collection process2:
● The payment gateway: it utilises encryption technology to verify credit card information provided by the customer.
● The issuing bank of the customer’s credit card: it receives the transfer request from the payment gateway and confirms the customer’s credit limit.
● The credit card company : it authorises or rejects the transaction.
● The acquiring bank: it deposits funds into the merchant’s account on the same day or the next day.
The online payment process seems complicated at first glance, but with the right payment gateway, thousands of sales and transactions can be processed at the snap of a finger. Once online payment becomes effortless, customers can make multiple purchases on your online shop with features such as express checkout2.
How to Choose a Payment Gateway?
Before choosing a payment gateway, shop owners should conduct thorough research and carefully consider the pricing model of each platform (e.g., monthly sales volume, platform subscription fee, fee per transaction, international transaction fee, etc.) and user experience (Whether the usage is simple? What payment methods are supported?), etc3.
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The above information is for reference only. For further information, please refer to the source and seek appropriate professional advice as necessary.
Article Published on 1 February, 2024
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