If you’ve just started up an online store or you’re moving towards accepting credit card payments, get ready to hear about payment gateways a lot! And we know there’s nothing more disheartening than being confused by concepts you have to deal with every day.
So, we’ve created this guide to explain everything there is to know about payment gateways and how they work.
What Is a Payment Gateway?
In simple terms, a payment gateway is a system that works behind the scenes of your website. Its job is to provide a safe bridge for the payments you receive from customers as they travel on their way to your bank.
Payment Gateways Vs. Payment Processors: What’s the Difference?
There’s a lot of confusion surrounding the difference between a payment processor and a payment gateway.
So, let’s clear up any uncertainty.
A payment processor works in the background to transmit the customer’s transaction details to and from your online business and the customer’s issuing bank all through the extra security layer of your payment gateway.
How Does a Payment Gateway Work?
Now you know the definition of a payment gateway, but how does it function? This process can be broken down into a few simple steps as follows and illustrated below;
- A customer enters payment details at checkout and presses submit.
- The payment gateway securely carries the transaction to the processor to the merchant’s bank.
- The processor sends the transaction to the credit card network (like Visa or MasterCard).
- The bank then re-routes the transaction to the bank that issued the credit card to the customer.
- The issuing bank will approve or decline the transaction based on the funds available in the customer’s account.
- The results are then taken back to the credit card network which forwards this information to the payment gateway.
- The payment gateway receives this message and sends it to the website. If the transaction is approved, then the merchant can deliver the goods or services to the customer.
- With regards to the money side of things, the issuing bank sends the funds to the network which passes the funds to the merchant’s internet account.
- The bank then deposits the funds 1-4 days later, into the merchant’s business banking account.
Why Do I Need a Payment Gateway?
The main job of a payment gateway is to provide an extra layer of security for all your transactions and to allow your online business to accept card payments from your customers.
The 2017 Australian Payments and Fraud Report, released information showing that Card-not-present (CNP) fraud had increased to $417.6 million in 2016. The results of this report indicate that online transactions are only getting riskier. Obviously, the need for a payment gateway, which safeguards your customer’s sensitive data is more critical now than ever before.
How Does a Gateway Protect Me?
If you have a gateway that is PCI Compliant and employs payment tokenisation safeguards, your business and your customers will also be protected.
Your gateway should have the highest level of PCI compliance, a tier-1 level. The highest level tells you that your provider goes through annual third-party audits and vigorous precautions to ensure payment security.
Safe2Pay is an Australian payment gateway that has the highest level of PCI compliance. As a tier-1 provider we undergo the following processes on a daily basis;
- We install and maintain firewall programs at all times to protect cardholder details.
- We protect stored cardholder data at all times.
- Encrypt transmission of cardholder data.
- Protect all systems against malware and regularly update anti-virus software.
- Develop and maintain secure systems and applications.
- Restrict access to cardholder information for unauthorised people.
- Restrict physical access to cardholder data.
Safe2Pay is proud to hold the top tier level of security, and it underscores our commitment to safety and the protection of customer data.
Sign Up with a Gateway That Goes the Extra Mile
Just being PCI compliant isn’t enough these days. As well as being PCI compliant your payment gateway should provide point-to-point Encryption. Meaning that the cardholder’s data is encrypted before it even enters the smartphone or tablet and will stay this way through the entire payment journey.
Safe2Pay not only is PCI- DSS compliant but goes one step further by offering point-to-point encryption with unique patent protected tokenisation. Safe2Pay -for every transaction- randomly generates a one-time token that masks customers’ real payment details keeping their private information safe.
Sign Up with Safe2Pay
Not only are payment details encrypted, but Safe2pay has also introduced a unique tokenisation technology that substitutes payment details with randomly generated numbers, based on a patent-protected, unique tokenisation process.
If you’re with a payment gateway like Safe2Pay, you know you’re in good hands, and you can get on with the things you love like running your business.
Contact Safe2Pay online or call us now on 1800 723 327 to ensure you have the most secure online business possible.