A payment gateway is the easiest way to make online sales. But in order to implement a payment gateway, you need to know a little bit about what a payment gateway is and how to find the right one for your business.
At DFC, our payment gateway is purpose-built for Direct Debit transactions, but there are multiple functions a payment gateway can satisfy, from retail sales to the sending of electronic checks – even refunds are possible.
What is a payment gateway?
The term ‘payment gateway’ can seem a bit ambiguous for those who are unfamiliar with it. But the concept is relatively simple. A payment gateway is simply an e-commerce application that authorises and processes financial transactions.
It’s essentially the online equivalent of someone going to the till to pay (hence why you’ll often see the pre-purchase page labelled as your shopping basket).
For example: if a customer wants to buy a bicycle through an online sports store, a payment gateway will enable them to enter their credit card details and purchase the bike without having to move from the comfort of their sofa.
The payment gateway process
The process of making an online purchase can take less than a minute. However, to be deemed complete, the transaction must go through four stages
| Purchase | Verification | Approval |
Transaction |
| During this stage, the customer will choose to make a purchase, hit the ‘place order’ button and enter their credit card details and billing info | The information is then routed to the customer’s bank account through a secure connection, ready for approval of the transaction | The bank approves or denies the transaction. Whatever the outcome, a response will be pushed back to the payment gateway | If approved, the transaction will be verified by the merchant’s bank. The payment can take anything up to 21 days to arrive but more often than not, the transaction is instant |
What do you need to consider when choosing a payment gateway?
Speed
In the age of instant gratification, this is more important than ever. People get bored easily so the process should be as quick as possible. Speed can be dictated in two ways:
- Processing speed – the length of time it takes for information to be processed. This should be high even during peak processing times.
- Form length – any form outlining personal details, payment information or product information should be concise and simple, whilst getting across necessary information.
The payment process should take no more than five minutes from start to finish.
Navigability
Poor user experience will result in your customer pressing the back button. Information must be clear and easy to follow. Consider the following before making a decision – are bugs a regular problem? Does the payment gateway look trustworthy? Can it be white labelled?
Security
We’re now well on a roll with GDPR and there’s been no shortage of breaches littering the news. We don’t need to tell you how important it is to offer protection and security for your customer’s personal data – particularly financial.
Make sure that the payment processer is level 1 compliant with the Payment Card Industry Data Security Standard (PCI DSS). Customer data must be secure during bank-to-bank transit and the payment gateway should house fraud detection tools, such as tokenisation.
Hosted or non-hosted
- Hosted gateways take users to a third-party page
- Non-hosted gateways mean your users don’t have to leave your website to make a purchase
A non-hosted gateway should sound like an automatic win, but it means that the buck stops with you. It’s a time-consuming process that requires you to become PCI DSS compliant.
A hosted gateway will usually be hosted by a payment bureau. This reduces the risk of storing and transacting cards or payment information. Because the bureau will already be compliant, it saves you having to make the effort.
Integration
Your chosen payment gateway should be able to easily integrate with your CRM platform. If you want to use a hosted gateway, then the integration process can happen without your involvement, as your supplier will be able to handle any communications with your CRM supplier themselves
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DFC is a leading Revenue Solutions Management Solutions provider, handling Direct Debits for thousands of happy customers across the UK.