Payment Gateways for eCommerce and Electronic Payment Transaction Processing

2017 proved to be a good year for ecommerce, as the global ecommerce industry continued to grow in all markets.

Cyber Monday made history by becoming the largest online sales event to this day. Reports show a total value of transactions of over $6.59 billion USD, which represents a 16% increase in online sales from 2016. Another important fact is that almost half of these purchases were made on mobile devices, signalling a new age of m-commerce in the West.

Although Black Friday and Cyber Monday brought a huge boost to online sales, Alibaba’s Singles’ Day, on 11 November, takes the crown. Over USD 25 billion have been spent by shoppers from 225 countries, making Singles’ Day an international shopping event. Furthermore, 90% of all the transactions have been completed on mobile devices.

I’ve covered some of the facts from this year and its obvious that online/ ecommerce businesses as well as mcommerce is heavily on the increase and I wanted to touch on an important part of the ecommerce setup, which is the payment gateway. The payment gateway is a critical component of the electronic payment process. The payment gateway serves to transmit card data and payment transaction data to the merchant’s payment acquirer for processing and settlement in a secure and compliant manner. The payment gateway must be compliant with PCI DSS (Payment Card Industry Data Security Standards) – and the payment gateway provider is responsible for this. The payment gateway works in collaboration with the card data and payment transaction data capture utility – i.e., the countertop credit card terminal, PC based point of sale system, eCommerce shopping cart, mobile phone, or virtual terminal.

The payment gateway is an integral feature of countertop credit card terminals and PC based point of sale systems and essentially is software or firmware performing data encryption and communication handshaking. For eCommerce, mobile phones, or virtual terminals, the payment gateway is provided by an online service provider who establishes an account for the merchant that is configured for communicating with the merchant’s payment acquirer over the internet.

An important consideration for the merchant is to ensure that the payment gateway is compatible with their payment acquirer, which shouldn’t be a major issue considering the main payment gateways will be integrated into the top acquiring banks. Similarly, eCommerce shopping carts may have restrictions as to which payment gateways they will be compatible with, which could possibly render them incompatible with the merchant’s payment acquirer.

In addition, the payment gateway provider may offer supplemental payment transaction services and resources to improve the convenience , security and efficiency of the payment processes and transaction records reporting for the merchant.

We Tranxact offer a variety of payment gateway options via our panel or providers and supplemental tools to accommodate all merchant needs. Let us help unravel the complexity surrounding payment gateways by formulating an economical end-to-end solution for payment processing that ensures equipment, system, and provider compatibility.