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ADDRESSING 5 COMMON MISCONCEPTIONS ABOUT PAYMENT GATEWAYS
Misconceptions can be misleading and can have a negative effect on your business. As an e-commerce merchant, it is important to ensure that you partner with the right payment gateway provider and not fall victim to the popular myths associated with the payment gateways.
To prevent you from choosing the wrong payment gateway, we have listed some of the most popular misconceptions about payment gateways.
1. 1st Misconception: Payment Gateways offer Banking Services
This is one of the main misconceptions about payment gateways. Even though payment gateways facilitate online payments but they are not banks nor do they offer banking services. Generally, a payment gateway is an interface between the e-commerce website and the acquiring bank. There are times when you may find that the payment gateway is under the acquiring bank but this does not alter their nature.
2. 2nd Misconception: Payment Gateways Hold Onto The Money that is Paid By Clients
Another popular misconception about payment gateway which is not true is that the payment gateways hold on to the money that is being paid by the customer. Basically, when a customer places an order on the merchant’s website, payment gateway gathers and securely stores the data and then processes and forwards the request to the bank which in turn transfers the encrypted information to the issuing bank for the approval purpose. Once the bank confirms the payment, information is backtracked and merchant informs the client about the successful transaction. Remember, a payment gateway doesn’t interact neither with the customer’s money nor with the merchant’s money at any point in time.
3. 3rd Misconception: Payment Gateways are not responsible for Customer’s and Merchant’s Private Data
Payment gateways aim is to offer defense to the merchants against potential payment data leaks and financial fraudulent activities. In short, a payment gateway is responsible for verifying the security standards of the merchant and for encrypting customer’s sensitive data. They do ensure that there is a secure transfer of information among the customer, the merchant, and the acquiring bank.
4. 4th Misconception: All Payment Gateways Offer The Same Services
It is a common misconception. There is no dearth of payment gateway providers in the market but different providers offer different services. For instance, some offer setup while some do not. Some offer great customer support service while some do not. No matter what the size of your business is, it is recommended to research and choose the right payment gateway that offers you the best services that meet your business needs and most importantly at the best price.
5. 5th Misconception: Companies offering Lower Processing Rates Are Better
If a payment gateway provider is offering low processing rate, it might sound like a good deal but remember, along with the processing fees there are many other factors also to consider. Low processing fees don’t always mean that the services will be good and vice versa. Consider all other factors like customer service, ease of integration etc when choosing a payment gateway provider. Besides that, different payment gateway providers offer different rates. Some come with zero setup fees, while some charge high transaction fees. The best payment gateway is the one which offers transparent pricing. It is recommended to look at the whole picture the service provider before you settle on one.
As you can see there are many misconceptions surrounding payment gateways. Payment gateway offers many advantages for an online business, so now that we have cleared out the common misconceptions, it is time to partner with the right payment gateway provider and explore their endless benefits.
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