Payment Gateways

What Are Payment Gateways?

A payment gateway is a method of payment for website users to buy goods or services via your website. 

A payment gateway is a technology used by website owners to accept debit or credit card purchases from customers.

The term includes not only the physical card-reading devices found in brick-and-mortar retail stores but also the payment processing portals found in online stores.

The workings of the payment gateway are integrated into the website (normally via a secure server) so that the user experience is not interrupted by diverting the user to a banks website. Payment gateways are used on all e-commerce websites.

A web developer would need to code in the payment gateway to your website and link it to your bank account.

How Do Payment Gateways Work?

The website owner would need to set up a payment gateway via an intermediary bank.  This is different to commercial or high street backs; kind of similar to a credit card system, in that you are using a third party to handle the money transfer.

The payment would go through the payment gateway where it is held, normally for a week’s time.  This gives the chance for a chargeback if the customer changes their mind and wants a refund.

If no chargeback is made, the money is transferred to your back account.

A payment gateway is the technology that, after the customer has initiated a card transaction, securely captures their payment details and transmits them to the relevant parties for authorisation. Essentially, it is the online bridge between your bank and the customer’s bank.

• Payment gateways are interfaces used to collect consumer payment information.
• In physical stores, payment gateways consist of the point-of-sale (POS) terminals used to accept credit card information by card or by mobile smartphone.
• In online stores, payment gateways are the “checkout” portals used to enter credit card information or credentials for services.
• Payment gateways are distinct from payment processors, which use customer information to collect payments on behalf of the merchant.
• There are also payment gateways to facilitate payment in cryptocurrencies like Bitcoin.

Why Use A Payment Gateway?

If you are taking payments through your website, you will need a payment gateway.  Whether it is for pence or pounds you will still need to have a payment gateway in place.

Payment gateways not only enable online transactions but also improve overall business operations. By providing a more secure and efficient transaction process, enhancing customer experience and facilitating global reach, payment gateways are an important component of digital commerce.

Most payment gateways are pretty much the same.

• They are easy to integrate onto your website.
• The gateway providers provide tech support if there are any issues.
• International payments can be made easily.
• They are cyber secure.

Why Do Banks Not Offer Them?

Banks did miss the boat on this one, but it was something that IT companies jumped onto.  When the internet was developing, online transactions were something that were needed. 

Paypal was one of the first independents payment gateways to set up; followed by a large variety of others.  The fact that IT companies were able to set up and run the IT side of things made them a good contender to provide online banking systems (as banks are more into banking/stocks).

Most banks do not have the experience to manage the software side of things and the resources either.

How Do I Get A Payment Gateway Set Up?

There are a wide number of companies that will offer them:

• Sage
• Paypal
• Pay360 (used to be Paypoint)
• HSBC
• Worldpay
• Apple
• GoCardless

There are now dozens of companies like the ones above (that are the best known ones) that offer secure online banking and they can be integrated into you website via using a website developer.

We do advise comparing quotes, as web development prices do vary.

The normal process would be to apply for the payment gateway, they send you T’s & C’s to sign and they do some credit checks.  If accepted, they will set you up an account and off you go.

How Much Do They Cost

There is normally a set up charge to get things up and running (with can vary from bank to bank) and some will charge a monthly charge.  It is common for them to take a cost per transaction or a % of the value of the transaction.

As more and more payment gateways come onto the market, competition is getting fiercer and the costs are coming down.

Are There Any Disadvantages To Using A Payment Gateway?

The only downside is that they are expensive.  Providers charge a monthly fee as well as a cost per transaction.  The more money you process each month, the more they make.

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