What are Online Payment Gateways?

Published Date:  12 Apr, 2022 | Updated Date:  23 Aug, 2023

What the heck is an online payment gateway, anyway? Find out in our quick-guide to understanding what a payment gateway is, and how you can learn if you’ve chosen the right one for your business. 

This article is Part 1 of 3 in our guide to Popular Online Payment Methods to Simplify Your Sales Process.

Step 1

What are Online Payment Gateways?

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Step 2

Top 8 Online Payment Methods to Consider for Your Business

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Step 3

What’s the difference between direct and third-party payment processing for my website?

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Whether you are looking to simplify the way you pay your suppliers, or accept payments from your customers, today’s digital era is ripe with tools that will help you make money through online sales. 

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It doesn’t matter if you’re a small business owner, a content creator, a manufacturer, or a niche service provider, you’ll need to have an understanding of different payment methods and gateway options to create a smooth purchasing process.

And if we know one thing at The Digital Navigator, it’s that a smooth purchasing process improves trust with your audience, and will incentivize them to come back for more!

What are Online Payment Gateways?

what-are-online-payment-gateways

When it comes to direct payment processing, there is one step to the process you should know about: online payment gateways.

A payment gateway is the technology that captures and transfers payment data from the customer to you, the acquirer. It keeps the online payment system seamless as it enables businesses to conduct online payments, and validates the banking information of the customer’s card.

These types of gateways ensure that funds are transferred successfully to your business. It acts as an interface between you and your customer, and is highly beneficial for ecommerce businesses who want customers to be able to purchase from the comfort of their homes.

Note: there is a marked difference between Merchant Accounts and Payment Gateways. Traditional businesses are more likely to opt for Merchant Accounts, while online businesses rely on Payment Gateways to function. You don’t need to concern yourself much with the difference, however if you are interested to learn more, you can reach out to us, or check out this article from ChargeBee. 

Most importantly, these gateways provide encryption to keep your customer’s information secure. These are tools that specialize in processing financial information, and often have the proper encryption and safety features built in. These gateways are the safest way to pay online when it comes to customer security.

How do I know if I have the right payment gateway?

Deciding which payment gateway you will use depends on what is compatible with your eCommerce/checkout system, as well as your eligibility based on what country you are based from. So the first step is to choose which platform you want to use, regardless of whether you plan to use third-party or direct payment processing.

However, for most businesses, this question is already answered for you. Shopify payment methods and Stripe have built-in payment gateways, for example. If you are using WordPress to host your website, then WooCommerce is where it’s at (though you can try Easy Digital Downloads or WP Simple Pay as well).

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This article is Part 1 of 3 in our guide to Popular Online Payment Methods to Simplify Your Sales Process. Click to read Part Two: Top 8 Online Payment Methods, or Part Three: What’s the difference between direct and third-party payment processing?

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