What Is A Payment Gateway And How Can It Increase Revenue?

While more and more business is being conducted online these days, choosing the right payment provider and payment gateway is one of the most crucial pieces of the puzzle. Companies like Zøtapay offer tailor-made, global payment services to businesses around the world, under an innovative, cutting-edge gateway hub.

When it comes to growing one’s business, whether it’s an online eCommerce store, a travel company, or a financial institution, working with the right payment provider is crucial. Companies with payment gateways that are robust and adaptable are the best choices to help businesses expand within new regions and into untapped markets. Firstly, let’s understand in more detail what a payment gateway is.

1. What is a payment gateway?

Payment gateways connect bank accounts with online sites to make payments to companies for products and services. Payment gateway software enables digital transactions, whether by bank wire transfer, credit/debit card, or other alternative payment methods. Payment gateways open up a new world of opportunities for global businesses that can sell their products across the globe and then accept payments in local currency. One of the primary features of a payment gateway is that it secures sensitive user information, including private data. With this, customers benefit from a seamless and straightforward online shopping process that boosts business for vendors and makes purchasing their products cost-effective and straightforward.

2. Types of payment methods 

For businesses with an online presence who want to expand and succeed long-term, offering customers maximum flexibility is critical. Customers who experience an enjoyable and straightforward checkout are more likely to return, especially when it comes to declined payments or long latency times for those transactions to be processed. For businesses, choosing the right payment provider for their online store is vital to ensure profitability. While different payment providers apply a range of fees to transactions, the software they use and their experience are paramount. Whether it’s credit/debit cards, prepaid cards, bank transfers, eWallets, or direct carrier payments, offering customers the broadest range of payment options possible has to be at the top of the list of priorities.

3. Alternative payment methods

Alternative payment methods help customers who don’t want to use a credit/debit card or other conventional payment methods, such as prepaid cards, eWallets, and bank transfers. Alternative payment methods, also known as APMs, have become more and more popular in recent years. APMs provide customers with a better online shopping experience, allowing them to send funds easily to friends and family. As it stands, APMs are set to account for around 55% of global online transactions before long. Some better-known examples of alternative payment methods are PayPal, Stripe, and Apple Pay, to name a few. Knowing what APM to offer customers is part of the vital process that every business needs to go through when setting up their online business.

4. Payment gateways vs. payment processors

Navigating the online ecosystem can be challenging, especially with all the terminology and financial jargon. Payment gateways and payment processors sound similar, but they are not the same thing. It’s vital for any business serious about entering the online market to understand the difference between the two thoroughly. While a payment gateway enables online credit card payments and the like, a payment processor is a third-party company that handles credit card transactions on behalf of a company. The bottom line is that a payment gateway is simply a tool that approves (or declines) various transactions, while payment processors are the ones who execute those transactions. 

5. Payment gateways vs. merchant accounts

For new online companies, navigating the world of eCommerce can be a slippery slope. That’s why it’s vital for them to understand the various digital payment services at their disposal and to tailor-make their eCommerce site to accommodate as wide a range of needs as possible. While payment gateways facilitate charging customers’ credit/debit cards, merchant accounts enable businesses to accept such payments via the web. Any company wanting to process transactions needs to apply for a merchant account, but it’s crucial to have that account with a reputable and experienced company.