Demystifying: Payment Gateways

3-minute read

Thurs May 03 2018

If you accept card and contactless payments – not just cash transactions – understanding payment gateways could be central to grow your business.

Payment gateways help organisations get the most from each transaction safely and securely.

What’s a payment gateway?

Sometimes just known as a gateway, in basic terms it’s a secure online link between you (the merchant) and your acquiring bank (the acquirer).

Your acquirer is the financial institution contracted to collect funds on your behalf from shoppers using credit or debit cards as their payment choice.

It’s the part of the payment process that accepts or declines a shopper’s card or contactless payment in your store or via your website or app.

It’s the responsibility of all merchants, payment providers and acquirers to comply with industry data and security regulations and frameworks. The highest level of security accreditation is the Payment Card Industry Data Security Standard (PCI-DSS) – all of Barclaycard’s payment gateways are PCI compliant.

In a nutshell, a good payment gateway does this:

• • Handles all your transactions, no matter how your customers paid.
• • Automatically brings complex data together and routes them to your acquirer.
• • Offers you extra tools such as fraud management for seamless payments.
  

So when a shopper chooses to buy from your store or website, your payment gateway validates your buyer’s card information and approves or declines the transactions.

Of course you want transactions to be approved because you want to make successful sales, but not at any cost to your business.

This gateway is essential to your business then, right? Right. And here’s why…

Customers want to pay how they want to pay

As a merchant, staying on top of ever-changing customer demands and payment trends is pretty difficult.

The best way to keep up – or at least not fall disastrously behind – is to partner with experts whose job it is to stay on top of trends and technological developments. They can advise you on the right solutions for your business and customer demands without draining your time and bottom line.

If you don’t give shoppers what they want, someone will be right there enticing them away from you – possibly forever.

Protect your business from fraud with a good payment gateway

The right payment gateway isn’t just about making sure shoppers can pay anywhere, anyhow, anytime; it’s also about protecting them, and your business, against fraudulent transactions.

The ins and outs of security and fraud in retail are many. But the bottom line is, if you accept fraudulent payments – however innocently – or you don’t protect your customers’ data in line with industry regulations such as PCI DSS, you could face business-crippling fines or non-compliance investigation costs.

So don’t just rush to find ways to grow your business by going omnichannel; pick the right partner, with the right solutions, with security as part of their service, so you can grow your business responsibly and without multiple hurdles.

This is the crux of all payment gateway discussions – how will it help you responsibly grow your business?

Here are five things to consider when picking a great gateway solution:

1. Think omnichannel. Pick a gateway that can grow with your business and work across all your sales channels.
2. Ensure peace of mind. Payments are the lifeblood of your business, so make sure your gateway has a really high up-time – well over 99% – and that it comes with round-the-clock support every day of the year.
3. Value-added services. A supplier will probably promise to configure a gateway to fit your business needs, but what happens if those needs change? It’s essential that you have access to services such as anti-fraud protection, to keep you ahead of the pack.
4. Think long-term. As Brexit has shown, things change, so make sure your gateway supplier is on the ball in terms of what’s happening in the payments industry – not just in the UK, but globally. You’re paying for the service, so you should expect proactive advice on how to keep your payments strategy fit-for-purpose in the changing commercial world.
5. Put safety first. It might not be the most glamorous subject matter, but with cybercrime on the rise, you need to be compliant and have good anti-fraud protection within your gateway. One of the best ways to keep your customers’ data safe is to outsource the risk – a fully hosted gateway solution with features such as tokenisation means that the supplier collects the payment data on your behalf. It’s their job to keep it secure and means you’re not going to get hit with big fines for being breached.

Here’s a set of questions that might be worth bookmarking if you’re thinking about growing your business with the help of payment gateways:

• • Am I giving my customers the option to buy from me however, wherever and whenever they want?
• • Do I understand my legal obligations as a business accepting card payments in the UK and internationally?
• • Is the payment gateway provider I’m considering reputable, as well as compliant with current regulations?
• • And does it have the ability to grow with my business?