What is a payment gateway? In terms of merchant accounts, a payment gateway is how electronic transactions are processed. A payment gateway is the element of merchant services in which payments from customer to merchant can be processed with the financial institution or bank.
What is a payment gateway?
For any new business or businesses looking to expand to an e-commerce enterprise, you might have heard this term and found yourself wondering, what is a payment gateway? Payment gateways are used in electronic transactions for store front businesses as well as e-commerce operations. A payment gateway is the equivalent of a physical point of sale terminal located in most business store front properties. The payment gateway works to protect debit and credit card sale details by encrypting the sensitive information like complete credit card number to make sure the payment information from customer to merchant and the payment processor remains secure.
How does a payment gateway work?
For those wondering, what is a payment gateway, it is important to know how a payment gateway works in order to fully understand what it is and how it is necessary to a business’ merchant services. A payment gateway works by facilitating the transfer of secure information between the payment portal, which can be a website, mobile phone or IVR (Interactive Voice Response) service, and the Front End processor or financial institutional. The payment gateway performs a series of tasks in order to process the transaction securely such as breaking down the information to encrypt via SSL (Secure Sockets Layer). The payment is then processed through a series of transactions to retrieve payment from the bank and then forward the information back to the payment gateway, which then forwards it back to the website or necessary interface. The entire process typically takes about two to three seconds.
Merchant Warehouse is a great example of a one of the best merchant accounts offering payment gateway services. Merchant Warehouse is a merchant services account provider and credit card processor that is known to surpass other companies in the industry based on its strong commitment to providing customers with quality merchant services. Merchant Warehouse was opened in 1998 and was one of the first companies of its kind to offer Internet-based credit card processing and equipment.
Credit card processing equipment provides businesses with the opportunity to expand and grow through the essential service of accepting credit card and debit card payments. Because plastic is a preferred method of payment for many consumers, it is important for businesses to be able to accommodate these types of transactions. Generating sales through credit and debit cards also protects businesses from unreliable methods of payment like personal checks and bank accounts. Using merchant accounts to expand to online sales makes it easy for any business to accept credit cards or debit cards online, which may lead to increased revenue. With all of the new merchant services technology, it is no wonder the role played by the payment gateway is so vital in ensuring successful online processing and other electronic payment transactions.