What is a Payment Gateway & How Does it Work?

A small to midsize business’ success depends on having an up-to-date, secure, and error-free payment gateway. Some people may be unfamiliar with the word payment gateway, but it has a simple description. Simply explained, a payment processor is the software that allows businesses to accept or reject debit or credit card payments. In truth, the definition of a payment gateway falls short of the critical role it plays in customer transactions, particularly in online retailers. The physical credit card processing device in a store, as well as payment gateways portals seen in online stores, are both examples of payment gateways. It serves as a link between the customer and the merchant. Customers will appreciate a smooth checkout procedure when you choose a top-notch payment gateway.

There are numerous reasons why buyers need a payment gateway system that is driven by cutting-edge technology to keep their business flow running smoothly and avoid difficulties. Payment systems, for starters, are required to authorize a customer’s transaction. The procedure draws to a standstill without a payment gateway. Payment gateways can assist in the reduction of fraudulent transactions by encrypting payment information and ensuring that personal data is securely sent from the client to the acquirer via the vendor.

Furthermore, an efficient secure method allows vendors to control and modify their online checkout web pages, and selecting the right payment method would help determine a company’s online store’s success.

Here’s a look at the important stakeholders in the payment processing method in further detail:

1. Vendors can buy items from a seller’s online marketplace.
2. The transaction is started by the client entering their credit card details.
3. The acquiring bank sends the vendor’s transactions to the issuing bank, which is the bank that extends credit to the cardholder. If the payment is authorized, the acquiring bank forwards the vendor’s transactions to the issuing bank for approval.

Even a minor delay in the transaction can make life difficult for both the company owner and the client. A technical problem that prevents the acquiring bank from receiving the transactions can halt the process entirely at best, or incorrectly deny a customer’s payment method at worst. From inventory management and stocking to planning sales and promotions to maintaining payroll and paying bills, small and mid-sized business owners have a lot on their plates. The last thing people need is a method by which they receive funds to fail.

Furthermore, a slow processing method unnecessarily delays clients, wasting their time both online and in person. Customers are less likely to return to your store, losing loyal customers, a vendor’s reputation, and potential earnings. NRS Pay, a credit card processing company, provides a comprehensive payment acceptance solution, including the payment processor.

Consider the following factors when selecting a credit card payment company:

1. The convenience of setup and cancellation; read the fine print, then read it again to prevent being caught with high cancellation penalties and hidden charges on a regular basis.
2. Analyze setup fees, registration costs and other prices of the company. Registration, refund, and processing costs vary depending on the processor. Examine the company’s customer service. Are they responsive? Is it easy to get to a live person? What are the customer service representatives’ availability in terms of their work hours?.

Start with NRS Pay today!

Submit the form or call us at (888) 990-9913 to take the first step in getting the best credit card processing solution for your business!

By Marko Georgiev