A payment gateway is a service provided by a merchant or acquiring bank that facilitates the transfer of funds from one account to another. Once the customer completes the transaction, the payment gateway passes on the details to the issuing bank, which checks the validity of the payment method and the customer’s credit limit. When all is OK, the issuing bank issues a response code that the payment gateway provider receives.
Secure Socket Layer (SSL) encryption
Payment gateways encrypt sensitive data from the customer before sending it to the issuing bank so that no unauthorized parties can see it. A payment gateway eliminates the merchant’s PCI DSS obligations since it connects the two parties over an encrypted connection. This payment processing system forwards the transaction details to the issuing bank, and the bank accepts the payment.
SSL certificates verify identity and encrypt data. As a result, the browser trusts the certificate authority and lets the user know the website is secure. As a result, the user feels secure entering confidential information on a website with SSL encryption. In addition, browsers typically display a lock icon when securely connected.
Secure authentication
The primary function of the payment gateway is to enable secure authentication. It does so by tokenizing a customer’s card information and passing it on to the issuing bank for authentication. The acquiring bank can then approve or decline the transaction based on fraud screening. The PoS terminal will then relay the details of the successful transaction back to the acquiring bank. Therefore, a secure payment gateway is essential to ensuring the security of payments made through your website.
SCA helps reduce fraud by requiring two or more different authentication factors (something you know, something you have, and something you are) to make a purchase. As more consumers use online shopping to make purchases, merchants need a payment gateway to detect fraud. Fraud detection is vital to merchants, and the built-in fraud monitoring feature of the payment gateway should enable businesses to set rules for high-risk transactions and limit them to manual approval.
Depositing funds
A payment gateway is a service that accepts payments via a credit card or other form of electronic funds. Customers enter their credit card details, security code, and billing address to complete their purchase. The payment gateway then forwards the information to the payment processor, which is then transferred to the merchant’s account. Payment gateways are often equipped with fraud screening tools, such as geolocation and velocity pattern analysis and address verification, as well as newer IP and velocity-based technology. Some gateways also allow merchants to hold payments until they review them, while others can decline the transaction even if the processor approves it.
Payment gateways are not the only tools that merchants need to accept payments. They can be helpful for various purposes, from e-commerce stores to small retailers selling products online. Most payment gateways offer multiple features, such as Address Verification System and Card Verification Value, which can help protect online businesses from fraudulent transactions. In addition, you can find payment gateways that meet your business’ needs and are PCI compliant.
Multi-currency support
A multi-currency payment gateway should accept, settle, and withdraw different currencies. It should also support multiple billing models and integrations with shopping platforms. You can also choose a payment gateway with built-in fraud protection, such as a 3DS fraud engine, to minimize chargebacks and increase your acceptance rate. But you should know that finding a multi-currency payment gateway can be challenging, so keep these features in mind when shopping for a gateway.
Many businesses, particularly those with international customers, need to accept payment in multiple currencies. They may also have to pay overseas suppliers. This is common among retailers, biotech firms, and technology firms. Offshore teams also process payments internationally. A McKinsey Global Payments Report estimates that the global payment industry will reach $1.9 trillion by 2020 and $2.5 trillion by 2025. As the global economy expands, multi-currency payment processing will be more critical than ever. A payment gateway will make it easier for businesses to accept payments from customers in any currency.
