Saturday, July 05, 2014

Introduction on eCommerce - Part 3

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Payment gateways


In processing online eCommerce transactions, not only do you need to capture securely a customer’s personal and payment data, you must also transfer it securely from and to the banks involved. As the diagram in above illustrates, this is done through a payment gateway, a software application that bridges your site’s shopping cart with the bank and credit card company systems.

 
There are several benefits to using a payment gateway. For one, they can protect against fraud. If a customer
uses a (reported) lost or stolen card, the gateway will prevent the transaction and protect you against charge backs. Secondly, payment gateways verify and process cards in the blink of an eye—saving you time. As above illustrates, the payment gateway routes the payment data to and from the banks and credit card companies involved, checks the validity of the user’s card, and makes sure the bank information provided is all above board. When the data is verified, the banks exchange funds to complete the transaction.

Popular payment gateway services such as Authorize.net, Amazon, PayPal, and VeriSign usually havea setup fee, a small monthly fee, and then a micro per-transaction fee. Note that the micro transaction fee is in addition to whatever VISA or MasterCard charges on each transaction. You can find a handy comparison chart of different payment gateway providers and their charges at http://payment-gateway-services-review.toptenreviews.com

If you do not plan to process many online payments, PayPal offers a hosted payment gateway solution called Payflow Link. By going online to PayPal and giving required business and banking information, upon authentication you can start processing credit card payments online in a few hours. Upon checkout your customers will be directed to a secure interim PayPal page to enter their credit card details. They are then redirected back to your site.

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