Payment Gateway 101 and its importance for your online business

Picture this: A small-town ambitious entrepreneur named Akash sets up a handicrafts store in his town. His business grew steadily and he found opportunities to scale up. He quickly sets up stores in neighbouring towns and gradually moves to metro cities over the years.

Cut to today, Akash has set up a full-fledged online transactional platform for his store with the facility for delivery as well. Over the years, he moved from cash payments to card payments and now uses a seamless Payment Gateway on his website that allows him to offer a smooth payment process.

This is the story of millions of SMEs growing in India!

In a recent global survey* conducted, it was found that 62% of Indian small businesses use a website, online store, or e-commerce platform as their main sales channel, making half or more than half of their revenue from online sales!

With the projection* for India’s e-commerce market at US$ 111 billion by 2024, if you’re also on your way to setting up an online business, here’s everything you need to know about Payment Gateways.

What is a Payment Gateway?

A Payment Gateway is an intermediary technology that allows businesses to accept payments from customers online. It acts as a bridge between your customer’s bank and your website, essentially handling the technical aspects of processing a payment end-to-end. Simply put, Payment Gateways make your customer’s payment experience quick, efficient, and secure.

Payment Gateway: A Digital Pathway for Online Transactions

Let’s say a customer would like to buy a handcrafted home decor item from Akash’s store mentioned in the story above. The customer logs into the app or website and finds the item they’ve been looking for. Happy to have found it, they add it to the cart, and click Buy Now, moving one step closerto payment. It is at this stage that the Payment Gateway comes into play.

Here’s a step-by-step of how the Payment Gateway process works:

1. The gateway requests the customer’s bank to verify if they have sufficient balance in their account to complete the payment.
2. Upon receiving a go-ahead from the bank, the payment is authorized to be completed.
3. Next, the Payment Gateway notifies the merchant that there is balance available and the order can be successfully placed.
4. The cost of the item is debited from the customer’s account and is sent to your account.

Payment Gateways are largely used by e-commerce or service apps and websites and are an essential part of the online shopping experience. They provide a secure and convenient way for customers to pay for goods and services online.

Payment Gateways Facilitate Secure Online Payments

When it comes to online payments, security is a top requirement. Payment Gateways ensure security measures are in place to protect customer as well as merchant data. The security provisions are two-fold:

• Encryption: Payment Gateways encrypt customer data before it is processed further. This ensures data is protected, securing it from fraudsters to steal data.
• Fraud prevention: Payment Gateways use fraud prevention tools to identify and block any possible fraudulent transactions proactively.

What role Payment Gateways play in the Business Ecosystem

Payment Gateways play an important role in the business ecosystem by helping businesses accept payments from customers digitally, which can help increase sales and revenue. Payment Gateways also make it easier for businesses to reach a wider audience, as they can be used to accept payments from customers all over the world.

Choosing the Right Payment Gateway for Your Business

The right Payment Gateway will ensure you have an efficient and secure system in place that handles sensitive customer information and enables smooth processing of payments, thereby improving customer trust and business. Here are the top 5 few questions to consider before choosing a Payment Gateway:

1. Does the Payment Gateway support the payment options my business offers?

One of the primary offerings to consider are the payment options. You would need to check if they include the major payment instruments such as credit and debit cards, NEFT, RTGS, UPI, etc. specifically based on your requirements. For example, if you have users worldwide, there should be a global solution that accepts international cards and currencies.

2. What security measures does it come with?

Security is of utmost importance for both customers as well as merchants, and should be at least compliant with industry standards. PhonePe Payment Gateway, for instance, is ISO 27001 and PCI-DSS certified, ensures data encryption, offers card tokenization, and uses fraud prevention tools to identify and prevent fraud in real time. Enabling a safe Payment Gateway such as the PhonePe Payment Gateway, helps reduce the risk of data breaches and fraud, that not only protects businesses from financial losses but also adds credibility to the brand.

3. How much transaction fee do I have to pay? Are there any additional fees involved in integrating the solution?

Pricing for Payment Gateways are based on the sales the business clocks, business category, revenue stream, and frequency of transactions. PhonePe Payment Gateway currently has an exclusive plan that allows you to try the gateway for free, with zero setup and zero maintenance fees.

4. How easy is it to integrate the technology to my business website or app?

Payment Gateways are a blessing to merchants who are looking for an easy-to-integrate solution. They streamline payment processing in a secure manner, allowing smooth transactions. PhonePe Payment Gateway has a very simple no-code setup for various platforms and plugins. Also, they extend end-to-end support for custom integrations, making the Payment Gateway integration effortless.

5. How do I get started?

The onboarding process differs from brand to brand. With PhonePe Payment Gateway, the onboarding process is quick and completely online, plus guidance as needed from customer support. In fact, PhonePe Payment Gateway offers complete tech support during integration as well, ensuring the complete process is seamless. You could register yourself by clicking here.

PhonePe Payment Gateway empowers your online business by providing secure transactions, enhancing customer experience, and expanding market reach. By understanding the significance of Payment Gateways and leveraging PhonePe’s reliable solution, you can unlock the full potential of your online business. Embrace the power of Payment Gateways and propel your business to new heights with PhonePe.

If you wish to begin registration, please click here.

*Data source: https://in.godaddy.com/blog/godaddys-small-business-data-observatory-2023-india/