Thursday, June 21, 2012

E-Commerce Payment Gateway Basics

An eCommerce payment gateway is a service that enables PC based credit card processing merchants to securely transmit their payment information to a processor over the internet (see our offering here). It is a part of every eCommerce merchant account and it integrates with the website's shopping cart. Typically, it is a third-party solution but there are credit card processing companies that offer the service directly to their merchants.

An eCommerce gateway will provide a browser-accessible interface that will allow merchants to review batches and manage their small business merchant accounts from anywhere internet connection is available.

It is important to understand that a payment gateway does not support a "card swipe" transaction acceptance method. It is a virtual service and, as such, will accept key-entered transactions, either by a cardholder on the merchant's website or, through a virtual terminal, by the merchant itself. It supports all features found in a physical terminal, including authorization, capture, refunds and voids.

Every major gateway provides fraud protection services, most notably AVS and CVV2 verification services.

It is important to know that internet credit card payment processing services are more expensive than their physical counterparts and one of the reasons is the cost of using a gateway. In addition to the other merchant account service costs, there are gateway transaction and monthly fees. These fees vary by credit card merchant processor but your monthly fee should not exceed $15 and your transaction cost should not be greater than $0.12.

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