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Payment gateway: here's all you need to know about it
Payment gateway: here's all you need to know about it

Responsible for connecting the e-commerce store to credit and debit card operators, the payment gateway must be carefully chosen by the merchant.

The final stage of the purchase process in an online store is the one with the highest percentages of cart abandonment. Therefore, an e-commerce site should know well what payment platform it will use.

In this market, offering accessible forms of payment to the end consumer — whether in terms of payment method, currency or even offering payment in installments, a common practice in Latin America — is the key change for companies to grow globally. In this sense, a payment gateway offers an important payment method integration for credit and debit card purchases.

This is a differential that has positive impact on customer conversion and loyalty due to the practicality offered, combined with greater security and agility. This software facilitates financial transactions by authorizing payments using local (domestic-only) credit cards for online retailers and other organizations.

Would you like to know more about it? Then, read the article below and learn all about a payment gateway: what it is, how it works, and its advantages!

What is a payment gateway?

A payment gateway connects the e-commerce store to credit and debit card operators, and is responsible for handling data and transaction details between the merchant, the payment processor platform, and the consumer.

This is one of a highly important foundations of e-commerce, since it allows the store to offer online payments in an agile, transparent and secure way, which sends card and purchase data to the payment processor.

How does this system work?

Whenever the consumer enters an online store, places items in the cart and chooses the payment method, the payment gateway comes into operation.

Based on the data entered by the customer, the system ensures that the payment is sent to the chosen institution. Therefore, the seller receives the amounts according to the terms and conditions defined by the selected institution.

The process goes like this: the customer chooses how they want to pay, and the store automatically contacts the financial institution to confirm that the information is true and to perform the checkout process. The bank or card brand also analyzes whether there is enough balance to complete the sale, then sends the purchase confirmation to the payment gateway. After that, the customer is notified that the payment has been approved in a few seconds.

Let's see a summary of the entire process carried out by the payment gateway:

  • the customer makes their purchase;
  • the store uses the payment processor to process the transaction;
  • if it's paid by debit or credit card, the gateway contacts the acquirer;
  • the card operator analyzes, processes and informs about the transaction, forwarding it to the card issuing institution;
  • the issuing bank analyzes the balance and security of the data;
  • finally, the transaction is approved or not.

What are the advantages of using a payment gateway?

Let's understand more about how using a dedicated payment gateway solution helps your online store:

Better payment environment and checkout

Depending on the payment gateway you use, the purchase can be carried out in the website environment, making the process faster. But there are other options, such as the following integration possibilities, depending on the chosen option.

Acting as a payment gateway is a part of the one-stop local payments solution offered by BoaCompra in its Payment Processing solution, which can be integrated in the following ways:

  • direct checkout API, where the customer pays directly on the page, without leaving the store;
  • e-commerce plugins, where the payment gateway offers a plugin to be installed on the most popular e-commerce platforms, ensuring fast and efficient integration;
  • specific payment page, where the customer is redirected, to a specific page of the payment gateway after the purchase;
  • payment link, in which the store creates and sends payment links for the consumer to make the purchase using the method they prefer.

Ease of use

The payment gateway being easy to use is a very important benefit to reduce the chances of the customer giving up the purchase. After all, if they wish to pay using their credit or debit card, and this method is not accepted by the store, the chances of cart abandonment increase.

The payment gateway also allows stores to negotiate interest rates directly with carriers and banks. Consequently, the sale value of the items tends to decrease, which satisfies the public.

Such ease and simplicity is also evident in the offer of resources, since the payment gateway allows, in addition to card processing, the following features: 

  • purchase with just one click;
  • re-attempt to pay if the first attempt fails;
  • reversed payment; etc.

Local payment methods variety

It is important for companies to understand the diversity of options that exist for receiving payments from customers and what their store's target audience prefers to pay. Certainly, credit cards will be among the favorites!

In this scenario, it is imperative to accept local cards (domestic-only), which means not just the ones enabled for international purchases, as they are a minority in Latin America.

Thus, it's important that you look for a solution that is more than a payment gateway, but a complete payment solution for your business. With BoaCompra, you can offer more than 140 local payment methods and currencies from 17 Latin American countries.

Greater speed

Without a payment gateway, the site's connection with operators and banks is slower. With this solution, financial transactions happen faster for both the consumer and the seller. Payment confirmation is immediate.

Regarding the customer, the wait for the purchase to be analyzed and approved is shorter. For the seller, the wait to receive the amount is also faster.

Security

The payment gateway operates in compliance with the Payment Card Industry Data Security Standard (PCI DSS).

This council sets the standards to ensure that all digital transactions are processed with the necessary security. This means that the payment gateway allows online stores and customer data to be protected.

As sensitive data must be recorded, the communication process between the payment gateway and the device used by the customer — such as a computer, smartphone, laptop, tablet — takes place through the HTTPS protocol.

Before sending the purchase results to the seller's server, payment gateways verify the store's server, either by token or by IP. Depending on the gateway, the online store also receives the SSL certificate and an anti-fraud system, which provide:

  • protection against cloning or theft of consumer cards;
  • encryption and data protection at checkout.

Transparency

Another advantage is not being necessary to redirect the buyer to another page when making the payment on a website or an app. This ensures the customer is more confident when making a purchase.

When paying, the consumer knows exactly how much they have to spend, which is especially relevant in international transactions, as the buyer is not at the mercy of exchange rate variations or foreign payment rates.

Cost reduction

We already mentioned that it is possible for the store to directly negotiate the fees with the bank or the operator, therefore paying percentages that are more compatible with the company's budget. Maintenance costs are also reduced.

Independence and autonomy

The seller has greater freedom to choose which payment terms will be carried out in e-commerce, such as which card brands will be accepted, which will be the maximum amount of installments and so on. Autonomy still allows faster transactions in the store. Again, this will depend on the provider you choose.

What is the importance of this type of technology today?

We have already discussed the benefits offered by a payment gateway to the online store and to the consumer, and how it helps them make a purchase. In addition, the business is able to connect with different acquirers in the market. Additionally, the manager can define the priority between them, according to the brands and the amount of available installments.

It is worth remembering that, as it is a technology that improves e-commerce, the payment gateway also makes all the difference to the store's competitiveness, especially when compared to other solutions.

We cannot forget that any e-commerce, of any market, needs to offer the public different means of payment, which is possible with the gateway system. That is, of course, if it wants to attract and retain customers and remain competitive in the current market.

The payment gateway also offers an efficient security system that protects users' information, allowing them to carry out transactions without excessive concern about cybercrimes.

With BoaCompra's solution, every operation is carried out without the need to open a branch or face the bureaucracy of the destination country. Additionally, there is the guarantee of receiving payments in its original currency — dollar, euro, real or pound — in a single installment, even if the consumer pays in multiple installments.

We are much more than a payment gateway: we provide all your local payment method needs, in a complete, one-stop solution. In addition, as we are part of the PagBank PagSeguro group, we act as an acquirer in Brazil, which further streamlines payment processes.

How to implement a payment gateway?

To implement the payment gateway in e-commerce, it is important to research the market and understand how local payment methods work. These are some of the questions you should ask:

  • Is the system really fast and cost-effective?
  • Is it compatible with the online store's profile?
  • Are there competing companies using the same system?
  • Does the chosen solution have the local payment methods I need to offer?

To start implementing this method, it is necessary to sign agreements directly with operators and banks. This may take some time, depending on the gateway platform.

Gateway systems involve operating fees, so it is necessary to assess what plans are available for the system to start working in your online store.

Payment gateway plans and features change depending on the company offering the service. Therefore, it is important to research and choose the plan that best fits the needs of the business. 

What is unique about BoaCompra's solution?

A payment gateway is just one part of what a proper solution should offer in terms of connecting international merchants with local payments. Therefore, it is worth noting that BoaCompra is a complete local payment platform, which allows sellers from all over the world to access Latin America

From a single integration, the Payment Processing solution offers 140 payment methods in 17 Latin American countries and sends money to any part of the world without incurring additional fees.

The platform has been in the market for 17 years and is specialized in working with the bureaucratic aspects of international transactions. It is also worth mentioning the advanced security technology involved, which uses artificial intelligence for fraud prevention and risk analysis. BoaCompra is part of the PagBank PagSeguro group, which guarantees the company's technical and financial resilience.

Because of this, many international companies trust the BoaCompra platform, which reduces difficulties and eliminates obstacles. Therefore, transactions take place more smoothly and safely during checkout. Among the companies that use the platform are Riot Games, Garena, Valve, Ubisoft, Avast, G2A and Xsolla.

The payment gateway is one of the best solutions for modern e-commerce, offering advantages that make it more competitive. Based on this technology, online stores are able to satisfy more customers, which is something very necessary at any time, especially when the economy is going through critical phases and competition becomes fiercer.

What did you think about payment gateway technology? Do you already use this technology in your e-commerce? Click below to contact us for more information about our solution:

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