Payment Gateway is a special service designed with a built-in billing processor that allows the collection of credit card information and its transmission across the Internet. In short, Payment Gateway is a digital equivalent of a credit card processing terminal. It is a software application that offers the functionality of a credit card company, allowing merchants to accept credit cards online.

Two Types of Payment Gateway:


• Secure Order Form: This is the most commonly used type of Payment Gateway. This takes the customer to a third-party site for ecommerce credit card processing and payment.
• Merchant-Side Application Program Interface (API): This is a code integrated into the server that hosts the merchant's ecommerce site.
  
  Advantages of Payment Gateway:
  
• Global 24/7 Commerce: There is little to no geographical or time barriers in ecommerce. Merchants can accept credit card payments from customers located anywhere in the world at any time.
• Convenience: Customers can pay online with ease and speed.
• Verification: Customers know instantly whether their credit card payment has been accepted or not. For the time it takes to get a check cleared, the real time monitoring of online payment saves time.
• Security: Guarantees 100% safe and secured online payment transaction. The charge-back facility that comes with online ecommerce credit card payment offers consumers a money back guarantee if the service fails to satisfy the customer.
• Cost-Effective: Saves the infrastructure cost of setting up a shop. Online payment processing also cuts down the cost of manpower.

Here is a list of the most trusted payment gateway service providers :

• Verisign
• Authorize.net
• Linkpoint Payment Gateway
• 2CO
• Paypal
• CCAvenue

Verisign, Authorize.net, & Linkpoint offer both an API and a secure website for storing consumer's credit card records. With these Payment Gateways, the ecommerce credit card processing is done in the Payment Gateway's secured site itself. Once processed, they will be re-directed back to the merchant's web site.

For third party credit card processors like 2CO, Pay pal, and CC Avenue, the merchant needs to use the ecommerce credit card processor's own proprietary gateway. This helps to stay in compliance with Visa and Master cards. After the customer checks out, the third party processor's secure web page will open. Merchants can customize this page and personalize it to match his ecommerce site, but the logo of the third party credit card processor will tell the customer who they are paying to.

Payment Gateway Checklist

While choosing the Payment Gateway best suited for your needs, keep the following points in mind:

• Payment Gateway compatibility is very crucial. Verify that the Payment Gateway service is compatible with the shopping cart package for your ecommerce site.
• Address Verification System or AVS protection is a must for payment gateways to reduce the risks of accepting fraudulent transactions, as AVS verifies the credit card holder's billing address with that of the credit card issuer's. 

Payment Gateways may include additional costs. Payment Gateways are available for as low as $40. A Payment Gateway acts as the mediator between the merchants shopping cart and the ecommerce credit card payments. Choosing the right Payment Gateway is crucial in determining the success of your ecommerce venture.