The payment gateway provides contact between the three parties in the payment process. It ensures that any transaction is carried out securely by applying different anti-fraud tools and operating in conjunction with the Payment Card Industry (PCI) compliance.

FREMONT, CA: If one owns an online store, they have to embed a payment gateway to process payments securely. A payment gateway is a dynamic mechanism that allows online and offline retailers to pay for debit or credit card payments. It ensures the smooth passage of such transactions by encrypting sensitive information data and transferring it between the purchaser, the online shop, and the bank.

The store functions as a payment portal, and the bank acts as a payment processor. The payment gateway thus provides contact between the three parties in the payment process. It ensures that any transaction is carried out securely by applying different anti-fraud tools and operating in conjunction with the Payment Card Industry (PCI) compliance. From a technological point of view, the payment gateway is a layer over the payment processor. It collects data from the customer and redirects the payment to the processor in an accessible format, based on the payment type chosen.

Payment Gateway vs. Payment Provider

One should understand the distinction between the payment gateway and the payment processor. Although the first is software, the second is the opportunity to use the software for its intended purpose. So, writing a working software does not mean one can embed it to the platform or market it to other traders right away. Next, businesses need to go through the certification process to link to the payment processor. Remember, creating apps is not a challenging task. On the other hand, the registration process can take months or even years. One can act as a provider only after securing all the required permissions.

Who Requires a Custom Gateway?

Here are the kinds of businesses that will significantly benefit from creating a custom gateway:

• Large merchants with high turnover who do not want to rely on a third-party provider.

• Incumbent billing firms who wish to replace or upgrade their applications.

• Hi-growth payment providers that require a more sophisticated payment delivery system.

• IT companies that plan to expand their business by serving as payment service providers.

• Acquiring banks who want to develop their front-end approach.

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