The size of the ecommerce market grows by the day and it has been important that technology has kept pace with this demand. The broad name for the means by which a company can collect money from its online customers is a payment gateway.
A payment gateway is just the means by which a website can perform like a credit card terminal in a retail outlet; it provides security by encrypting the details of a credit or debit card so that those details are secure from any outside party with only the customer, the supplier and the card processor aware of the transaction.
The gateway’s role begins at the point of a decision to buy with the customer pressing a button making an order.
The information is encrypted between the customer and the website of the seller which sends the transaction to the payment gateway. The process of authorization involves ensuring that it is a valid card that is being used.
There are reasons why an order may be declined insufficient funds for example; a payment gateway is a secure form of the process that used to involve a sales assistant making a telephone call for approval. The process of doing all the necessary checks and ensuring no one can access the card details for future use takes only 2-3 seconds.
The seller is likely to be credited with the funds within 3 working days from the time a buyer submits his or her details and proceeds with the order. Inevitably when money is involved there is the chance of fraud and there are ever increasing levels of sophistication required to prevent it.
There is of course the need to get a means of accepting the money through a merchant account set up with a bank or talking to a third party who will accept payments on your behalf. There are costs in setting up a merchant account of course.
Anyone wishing to take payments on their website needs to recognise that credit cards are the means by which business is transacted these days and so a trader needs a credit card facility. It means that the potential market for your products is so much bigger the impulse buyer being a prime example. A personal merchant account is not essential because there are other means of receiving funds but there is really no way round accepting credit cards.