Ecommerce isn’t a “plug and get paid” solution. Merchants need to make smart choices about their payment partners – the services that process transactions. Among the most important decisions is which online Payment Gateway to use.
An internet Payment Gateway service has one basic but very important job – securely moving payment data through the entire financial services chain in order to validate a transaction.
Here’s how it works:
1: Customer provides payment card details.
2: Payment Gateway routes the transaction details to the Payment Processor.
3: Payment Processor transmits the request to the Credit Card Network.
4: Credit Card Network identifies the issuing bank, and routes transaction for verification and approval.
5: Credit Card Network sends “accepted” or “declined” response to the Payment Processor.
6: Payment Processor sends accept/deny info to the Payment Gateway
7: Sale is processed, or customer is given the option to use another payment method.
As noted above, the Payment Gateway is just one piece of the ecommerce transaction puzzle. Vendors also need a Payment Processor and a merchant account to get paid.
This depends on your business. Questions to consider when choosing a payment gateway include:
Does my Payment Processor prefer/partner with specific Gateways? It’s often a good idea to choose your Payment Processor before you pick a Payment Gateway. A full-service Payment Processor can eliminate the stress and time involved in researching solutions and help you put the ecommerce puzzle together in a way that makes sense for your business. This is especially important if your business is classified as “high risk.”
Does the Payment Gateway integrate with my ecommerce platform/website? If you need or want to use a specific ecommerce platform, you’ll obviously need to work with a Payment Gateway that is accepted by and integrates well with that platform. Check to see what services the platform recommends. Here again, if you have a high-risk business, make sure that the platform and its Payment Gateway/s will process your transactions. Many will not accept transactions from high-risk merchants.
How long will it take to activate my account? Some Payment Gateways can be activated almost immediately; others will make you wait for 3-4 weeks. If you’re just in the planning stages, a month’s wait may not be a problem. If you’re ready to open your business now, find a Payment Gateway that can get you up and running as quickly as possible.
What are the fees? Cheaper isn’t always better, but do check and compare the set-up costs, transaction fees, and monthly fees. Also, check chargeback fees and look carefully at the fine print to see if there are any additional costs.
Data Security and Payment Gateways
As noted above, the Payment Gateway’s most important job is to keep data secure while it is moving to and from the merchant website, the customer and merchant’s banks, and the payment processor. To help ensure that the data is protected, a payment gateway must comply with a set of security standards known as “The Payment Card Industry Data Security Standard” (PCI DSS, commonly called PCI). The current version of PCI is v3.2It is essential that you use a Payment Gateway that is certified as a PCI Level 1 Service Provider. And since PCI is a shared responsibility, your Payment Processor and ecommerce solution, as well as your website if it’s part of your online store, should also be PCI compliant. Any business that accepts, transmits or stores payment card data must comply with PCI, to the appropriate level for the amount of transactions that are processed by that business. Level 1 is the most rigorous, intended for businesses and service providers that process an exceptionally high-volume of transactions.
Also, look for a Payment Gateway that offers fraud protection and other payment security tools to help reduce the risk of fraud, loss and chargebacks. Your Payment Processor may also offer these services.
Do I run a “high risk” business and if so does the payment gateway work with me? In many cases, high risk businesses need to work with select payment gateways and payment processors.
Financial service companies consider some types of businesses and industries to be high-risk. This typically means that the business is part of an industry that has a high average of chargebacks or payment card fraud. High-risk industries include online gaming, online dating, telemarketing, pharmaceuticals, adult products and services, travel services, Bitcoin trading, e-cigarette/vaping devices and products, timeshares, and CBD sales. A merchant’s own financial history can also result in the business being classified as high-risk.
Whatever the reason, if your business falls into the high-risk category, you may have a difficult time getting approved for the ecommerce payment services that you need. The easiest solution is to work with a Payment Processor who specializes in high-risk accounts and who works with a Payment Gateway provider who will process your transactions.
T1 Payments specializes in meeting the needs of high-risk merchants, providing a full suite of Payment Processing and Payment Gateway services that integrate with over 175 different shopping carts. T1 also offers comprehensive account monitoring, reporting and support to help high-risk merchants avoid chargebacks, fraud and other business risks. To find out more about our customizable global payment solutions for high-risk merchants please visit t1payments.com or call 866-518-2216.