The way we make payments has changed the way we do business. It has made the lives of consumers and business owners alike so much easier. With online payment gateways, payments can be made via a mobile phone or computer, transferring money directly and safely from one account to another. Simple, convenient and easy to use, the online payment gateway is not a thing of the future, it is already here.
With online shopping and online banking becoming more popular by the day, more and more businesses are making it easier for their clients to shop with them by making online payment option available. An e-commerce payment system can be used by pretty much anyone, so long as they have an internet connection and an account.
The rise of the online payment gateway
First there was paper money, then there was plastic money, and now there is virtual money. But this is an evolution that has happened over a period of time, rather than something that has happened over night. Ecommerce payment systems allow a person to pay online using just their credit cards or by making an online transaction. These transactions are totally safe and allow users to shop easily knowing that their details are being protected, while businesses enjoy the benefit of not having to rely only on walk in customers but to also have the second income coming from the online shoppers. Websites can be designed to offer ecommerce or a company can enable financial transactions to take place over the internet via a gateway such as PayPal, for example.
It was only natural that with the many advancements of the internet, being able to buy and sell online, while also being able to make other payments over the internet, would become a part of the online evolution that has had such a profound effect over the world.
The different types of online payment options
The credit card has certainly been the most favored transaction method to use when making an online payment. Most people these days have credit cards as most banks issue credit cards. Debit cards can also be used to make payments while online, virtual wallets, such as those offered by PayPal, and of course the Bitcoin are all changing the way that people are making payments.
Much of the terminology surrounding payment processing and online payments is used interchangeably. To clear up the confusion here are the terms most commonly used:
- The online payment gateway
If ever there was a secure way for a customer to use their credit card online and for a merchant to receive credit card payments, it would be to use an online payment gateway. This online method allows people to exchange credit card information so securely that the information is encoded before it is seen by the merchant but the merchant will still receive the payment. The payment gateway will basically act as the middleman between the merchant and the customer.
- The merchant account
This system consists of a bank account that allows the merchant to accept a credit or debit card payment, with the money going straight into the bank once sufficient funds have been confirmed. When you swipe your card in a shop, have you ever watched the processor going through the motions? While it is doing this it is determining the amount of money available in your account. When a merchant wants to sell something they will need an account and a payment gateway.
- The payment processor
This is the company that a merchant is going to use to handle the transactions that are taking place via credit card or debit card. This company is usually a third party and will be appointed by the merchant.
How has the payment processor changed business?
Being able to accept payments using a variety of methods has transformed business in only the best of ways. A payment processor basically organizes the transaction between the buyer and the seller and by doing so they make sure that the card has sufficient funds available on it for the transaction to be successfully made. In order to enable this, the merchant is going to need a payment processing company (again think PayPal and MyGate).
The way that this has changed business is that the merchant is now able to take payments in a number of different forms including a card transaction, EFT transaction and of course the traditional cash payment. And the company isn’t pilled with extra work by having to ensure that each client has the funds available to make the payment. By being able to accept transactions of all types, businesses are able to offer their services to more clients than ever before which in turn means more profits.
The payment processor has changed the way that we do transitions, and this change has led to big business profits and big competition within the payment processing industry.