If your goal is to augment your business and efficiently process payments to enhance your cash flow, by now you must be sure that payment gateways are the most compatible of all. Payment Gateways are not only the most secure and simple way to process the transactions made at consumer’s end, but it also eliminates the distrust enhancing your cash flow.
Adopting the apt payment gateway for your business is very crucial as they manage your payments besides validating credit card details of the consumer, to ensure the ample amount of funds are available to process required transactions, to allow transactions and transfer funds to the merchant’s account.
To ensure your decision of choosing the right payment gateway doesn’t become one of your worries you may need to understand how payment Gateway works?
The answer would be 4 steps which are:
• Collection
The consumer on your website selects the product enabling the cart to calculate payment post which the payment page appears where the consumers fill out the details and the information is transmitted to the payment gateway.
• Authentication
The payment gateway receives this information and sends it to your bank account encrypting the details.
• Authorization
Once the sale gets accepted by the payment gateway, you can deliver the consumer’s ordered product.
• Settlement
Post verification of the transaction data by your bank the amount is deposited in your merchant account. As per the payment gateway norms, the pay-out is settled into your account.
Fees and Policies
Since now you understood, how the payment transactions occur at payment gateway and how you receive funds in your business account at the end.
Let’s address fees and processing.
Almost any party associated with the transaction wants to get paid because of the obvious reasons. These parties include Credit card associations (Visa, MasterCard, etc.), issuing bank, payment processor and the merchant bank.
For every transaction started, you will pay various fees:
• Processing: The processor charges a fixed amount of funds on each transaction you process, they charge setup, account cancellation, monthly usage, etc.
• Markup: The Merchant bank charges the markup fees, it totally depends on the industry and the processing volume.
• Interchange: The issuing bank gets a pre-negotiated percentage of every sale, similar to markup however it depends on the price of the sale and the monthly processing volume. Kindly refer the list of the charges
• Assessment: Association of the credit card (Visa, MasterCard, etc.) charges a fixed amount of the transaction as the percentage known as assessment.
