In today’s world, paying for things has gotten much more complicated than it used to be. The world is now entering a new era in which credit or debit cards are now much more preferred by many. These methods of online payments are now the mainstream and are in with the new normal.

NFC-based payments (near-field communication) has allowed customers to pay with their smartphone (or even smartwatches). This caused customers to experience a whole new level of almost seamless and cashless transactions. The COVID-19 Pandemic has sped up the demand and development of these processes and platforms.

Payment Processors

Payment processors act as instruments for communicating payment transactions for the seller and the bank handling the transaction. This is a service provider that checks and authorizes the payment. It does so by ensuring that adequate funds are present in the buyer’s account, no recent issues that limit the account, and that the card’s validity is still a green-means-go before transferring the funds to the seller.

Payment processing can be done online (made on websites) or in person (card swipe). Payment processors, of course, handle the security of the payment system since strict security rules are currently in place for online payments, such as the PCI Compliance standard. All payments are sent via secure encrypted connections or by managing the protocols required for recurring, safe invoicing in subscription payments.

Now, payment processing for small business can maintain complete transparency while quickly and effectively taking credit card payments in all currencies. The Payment Card Industry Data Security Standard (PCI DSS) is the baseline of compliance for every business that accepts card payments and retains or processes consumer data to prevent cybercrime.

Payment Gateways

Payment gateway is a tool that securely sends online payment data to the processor, allowing the transaction to continue its lifecycle. So this is basically an app that enables businesses to execute transactions entirely online. It permits cashless and card-not-present purchases, a common thing on eCommerce sites. This will be one’s business’ point-of-sale terminal.

In general, setting up a payment gateway would be a collaboration with the preferred credit card processing bank. Some credit card or payment processors use third-party payment gateways, and some operate their own payment gateway system. However, it is advisable to set up a payment gateway through one’s merchant account provider to avoid compatibility concerns.

Sometimes, payment processors and payment gateway are used interchangeably, referring to a payment processing network that monitors and checks the legitimacy and security of a transaction. They also transfer cash from and to all parties involved. But one has to keep in mind that payment processors are enablers of transactions, while payment gateways concern and convey the approval or rejection of transactions between customers and sellers.

Payment Processing Methods

To ensure that one would receive cash from the customer they expect to have, it is ideal first to access a payment processor. The processor would serve as a vessel that can systematize transactions among the parties involved.

It is essential to know the two categories of Merchant Services Providers: Traditional full-service and Payment Service Providers. If one chooses the traditional, one would have a unique identification number that distinguishes the business to all parties involved in the transaction. These accounts are incredibly reliable but pretty costly for a small company.

If one chooses the Payment Service Providers, one won’t have a unique merchant account ID number. Each merchant who uses the service has access to the same merchant account. Because of this, these accounts are not that stable as actual or authentic merchant accounts. Small businesses would think it’s practical to access this since the costs are much lower.

Read More: How Can You Make Your Payment Process More Secure?

Provide Different Payment Methods

Researching the target audience of one’s business to determine which payment methods they prefer would, for sure, capture the attention of the vast majority of consumers. If one wants to have a good combo, then allowing direct bank transfers and payments from all major credit cards would be a great move.

Provide a Simple and Unified Design

Consistency is appealing. Utilizing the same colors, fonts, and style throughout one’s online stores and transactions would surely help your business stand out. It is essential to control the look and feel of your checkout page.

Reassure Safety and Privacy

Developing confidence with potential buyers is vital. Reassuring the safety and privacy of the transactions being made should be a part of one’s plan when planning to have cashless transactions. Posting and showing the Secure Sockets Layer (SSL) certificate on your website would greatly help.

Sticking to the PCI Security Standards Council’s guidelines (PCI SSC) would also help one get the trust of one’s potential customers. Good thing that payment card companies enforce PCI compliance. Anybody who has anything to do with the cardholder data is heavily monitored by the PCI Security Guidelines Council, which oversees security standards.

Takeaway

With so many payment options, it’s not a bad idea to evaluate which ones are most suitable for your company. Generally, what determines the required account (full-service merchant account or a payment service provider) for one’s business is the size and nature of your business. Still, one could always decide on their own which is which.