As a consumer, one of my favourite moments is pressing the checkout button, I could just feel the rush of endorphins and dopamine hitting me. For business owners, I assume it’s the same when they receive a payment. How does this process happen exactly? Maybe you have an online business and want to know? Or perhaps you want to start one? If so, you might want to know a little bit more about the payment gateway.
What is it?
A payment gateway is basically how you (a business owner) get paid by a customer. The technology is available both offline; which can be found in a point-of-sale (POS) system, and online; it’s the “checkout” service that connects you to customers.
How does it work?
Well, the process for the customer may only take a few seconds. Meanwhile, in reality, it involves five parties. Who are they exactly? The business owner, the customer, the customer’s bank, the owner’s bank, and card schemes (Visa, Mastercard, etc…).
To simplify it, let’s bring one of our favourite characters from FRIENDS; Rachel Green, the shopaholic. Imagine Rachel trying to buy Gucci’s Flora single diamond earrings. What’s gonna happen is that Rachel will enter her debit/credit card info. online, then the payment gateway will make sure that her bank account has enough funds to make the purchase. Next, the payment gateway will send the card info to the card schemes. When Visa/Mastercard send their approval, the payment gateway will give the okay to Gucci and then sends the money to Gucci’s account.
If, however, Rachel doesn’t have enough money to make the purchase, the payment gateway will block the buying process. Simple!
Is it worth it?
Absolutely! Payment gateway protects both business owners and consumers. Without it, both merchants and consumers could fall victim to fraud. Not only that, but in our digital economy, no business will be able to survive without an online presence and offering convenience to its customers. As much as we love actually going shopping, romanticizing the idea of physical stores alone will not pay the bills.
Set it up
To incorporate a payment gateway with your business, you need to sign up with a payment service provider such as; PayPal. Services like this will make it easier for you as a business owner as it will handle the whole process from beginning to end.
So, what are you waiting for?!