|November 10th, 2022|
Driving faster revenue with constant growth requires stable business and technical innovation. To expand into new geographies and business lines, many technical innovative companies broaden the horizon of their infrastructure with different payment gateways.
Front-end technology is highly responsible for sending customer data to the merchant’s bank account; payment gateways play a crucial role in completing a sale. They are an absolute necessity for every business. Accepting payments and processing transactions can be difficult for all companies without payment gateways.
Let’s dive into what is a payment gateway and how using multiple payment gateways can benefit the business with high revenue and constant growth.
What is a Payment Gateway?
A payment gateway is a technology that facilitates merchants to accept debit or credit card payments or purchases from their customers. These gateways don’t apply strictly to physical card-reading devices in retail stores.
With online payment in the picture, payment gateways act as mediators between the merchant’s website and the receiving bank. They transfer all the purchasing information from the merchant to the bank, authenticating the credit card details and allowing the transaction.
If put directly, whenever you fill out the checkout form on a website, the payment details you provide for your purchase– like the payment gateways acquire card details. After acquiring it, they will process it and transfer it to the receiving bank. Moreover, gateways use encryption and tokenization to secure all the credit card data and ensure the safe exchange of information between all the parties in the transaction.
How does Payment Gateway work?
Step-1 Making a Payment order
At checkout, business merchants will use the gateway to establish a new payment order in the system. After the order has been completely established, the gateway will return a payment link or a form where the buyer can fill out their card details. The information is then encrypted under the authentication and requirements of PCI-DSS and forwarded to the merchant’s acquiring bank.
Step-2 Processing the Data
The payment network receives the encrypted data managed by the acquiring bank and then sent to the processing center.
Step-3 Confirmation of the payment details
In this step of the payment process, the processing center will verify the payment details with the issuing bank and then confirm that the transaction can move forward, responding to the request of the payment gateways of approval or decline. When everything is verified, the transaction will be approved.
Step-4 Transaction completion
With all the verification done, the permission response (approval or decline) is sent to the payment gateway along with the merchant’s site informing the buyer about whether the payment has been successful.
Multiple payment support creates a great customer experience.
Experiencing faster growth and constant revenue is a part of delivering an outstanding customer experience. Customers that constantly return to the merchant’s website and recommend it to other customers can add a great fortune to a business. As stated above, the process of accepting payments is crucial for granting an excellent customer experience. Repeated declined transactions and longer response times can damage the business’s goodwill and reduce the customers’ lifetime value.
With creating a great customer experience, multiple gateways also possess various significant benefits. Let’s take a look at them.
Benefits of using Multiple Payment Gateways
1. Supports Business Innovation
E-commerce growth has been skyrocketing for the past few years. As this growth rises, the industry will see more innovative businesses investing in the market. With the support of multiple payment gateways, e-commerce services can invent unique and dynamic business models.
2. Reduces cart abandonment
The biggest hindrance for every merchant selling online is cart abandonment. According to different analytics, the average cart abandonment rate is about 70%, but some industries may experience up to 81%. However, facilitating them with multiple payment gateways gives them the freedom and flexibility to select the one that provides the cheap transactions.
3. Meet your customer needs
The most important benefit of using multiple payment gateways is that it enables merchants to meet the needs of their customers. Finding all the features in a single payment gateway can be daunting and lead to a decrease in conversion rates if the customer won’t find what they are looking for.
By providing freedom to your customers with multiple payment gateways, you ensure that their needs are fulfilled at the payment processing stage and contribute to repeated sales and outstanding customer experience.
4. Back up your payment flaws
An excellent payment gateway can also face downtime once in a while— and when this happens, customers may encounter difficulties completing their purchases.
Offering multiple payment gateways can back up this downtime and provide a hassle-free experience to your customers with their purchases.
5. Increase geographic coverage
With the evolution of the payment industry, two kinds of providers emerged. One that offers a combined gateway and merchant account and the other that offers only a gateway. Despite the high transaction costs, simple merchants choose the integrated approach. While innovative and dynamic merchants were comfortable managing the second approach with cost-effective transaction fees. Although both were good choices, there is a middle ground where the merchant can take advantage of both.
Payment gateways are an essential component of your customer’s purchasing experience. Build a partnership of trust between your business and customer with multiple payment gateways. From ensuring a great customer experience to optimizing your payment, a company can quickly skyrocket its revenues with them.