What is the Difference Between Payment Gateway and Payment Aggregator?
Payment Gateway and Payment Aggregator are payment terms that are widely used online. Some people have a habit of confusing them together but there is a difference between the two. In fact, they are two completely different categories. Included in this post, we will be explaining to you how a payment gateway and a payment aggregator work. In addition to that, this post will inform you about how online payment processing works. Also, this post will provide you with a brief history of online payment processing and tips for preventing e-commerce credit card fraud.
What is a Payment Gateway?
In order to accept payments from your customers you need an e-commerce payment solution, and that’s where a payment gateway comes in. A payment gateway is a company or software that bridges the gap between you and the customer by handling all of the transactions for you. It also functions as an interface between you and your payment processor. A payment gateway provider accepts credit cards or debit cards on behalf of your business as a part of an integrated processing system. It then forwards the transaction data to the applicable entity (bank) for authorization and funds settlement. It’s a secure web link between your online shopping cart and the payment processing network of your choice.
The gateway provides a secure connection to this network through an encrypted connection over the Internet. Commonly, they provide some type of ‘tokenization’ system. They act as a substitute for your real card numbers in order to protect you from fraud in the event that hackers are able to intercept your information on its way from your computer to the bank or credit card processor. Payments are usually authorized using AVS (Address Verification System) and CVV 2/3 (Card Security Code).
For all practical purposes, a gateway takes care of the authorization of your electronic transactions for an online merchant and routes them over the internet. Moreover, most gateways take care of transaction clearing and settlement between your merchant acquirer bank, typically also referred to as a merchant account provider, and your customers’ issuing banks.
Security
Online security is imperative for all businesses, but especially those that process credit cards. Having a payment gateway in place ensures your online business runs smoothly and securely. High quality gateways provide encrypted communication to ensure that information is safe and secure. You should always ask if they are PCI Certified. PCI stands for Payment Card Industry. This means they will adhere to industry standards and prevent any financial loss or data theft. It provides end-to-end encryption of sensitive data. This lets you know they are compliant with all existing regulations across the globe. As a result, you can expect regular auditing and compliance reports.
As an online merchant, you’re always concerned about the security of your customers’ sensitive financial information as well as your own business. This is why internet businesses are turning to payment gateways to process transactions. Today consider payment gateways as a necessity rather than an option. It’s important that these platforms are used by both established and novice entrepreneurs so they can have peace of mind when it comes to accepting card payments online.
What is a Payment Aggregator?
A payment aggregator (P.A.) is an online platform for processing transactions for financial institutions and merchants. It makes it easy for customers to make a payment. And it offers benefits to both consumers and business owners. Payment aggregators are also commonly referred to as Payment Service Providers (PSP). PSPs offer advantages to both the customer and the merchant.
What are the benefits of using a P. A.? It enables you to process credit card payments from your customers. The P.A is a payment component that can be integrated with a number of gateways. They can accept input from the user and your gateway that supports credit card payments. Online businesses are growing at a fast pace. Merchants are striving hard to keep up with the demand for their products and services.
So what enables merchants to accept online payments? Payment aggregators have come into the picture making it easier and more convenient for your customers to pay. It is also worth noting If you have an eCommerce store, you must be familiar with the fact that accepting more payment options helps you improve your conversion rate. In the present day, accepting multiple payment methods is a clear win. This is due to a growing number of buyers wanting to use their preferred method and not just credit cards. This is exactly why companies like Apple, Amazon, and PayPal have allowed customers to pay online using gift cards and direct bank transfers. These are all good alternatives as they will save you money and hassle down the line.
Final Thoughts
When you are building an e-commerce business, it’s important to make sure that the process of accepting payments is secure and backed by a reputable company.
It’s important that you find a payment processor that meets your needs and has been vetted by others in the business. In the end, it is best to do your research through your payment processor or merchant account or to contact us directly for help. FintechMerchantAccounts account representatives are experienced and here to help serve you and answer any questions you may have with your new business. Click HERE to Contact us today to get started! You are also welcome to call us directly or ask Sandy as well.
Additional Resources
As you may know, there are many options for accepting payments in a business. Whether you are an entrepreneur working from home or at a storefront-type business. Selecting the right payment processor is about finding the one that will work best. You should make sure it is in line with your marketing goals and help you achieve success with your available payment options.
You will want to make sure that they are legitimate, affordable and you are getting all of the value that you should. As with everything else related to your business, you will have to do the research on your end. That being said we have included the links below to articles and posts that will assist you in doing that research. We think you will find it helpful and interesting.
