If you’re the owner of an established brick-and-mortar business with no online presence, you’re already starting well-behind some of your competitors. However once you’ve made the decision to build your online presence, it can be a rewarding and fulfilling platform with which to grow your business – as long as you know which decisions to make and focus your efforts in the right areas.
Two areas that businesses need to consider – especially if they are looking to build an international presence – are payment gateways and merchant accounts. As today’s online marketplace requires businesses to be truly global and accept credit/debit payments from anywhere in the world, businesses need to understand international payment gateways and merchant accounts with a view to addressing international trade.
A payment gateway is an ecommerce application service provider that authorises credit and debit card payments for ecommerce stores/businesses. Think of it as the online equivalent to a point of sale terminal you’d find in brick-and-mortar stores; it facilitates the transfer of information between the website and the acquiring bank.
So, for example: an international customer wishes to purchase a product from your merchant site. The customer submits their credit card details and the merchant submits this data to the payment gateway over a secure connection. Following on, the data is formatted and passed to the merchant bank’s processor, who in turn, sends it to the credit card network (interchange). It then goes to the issuing bank to either approve or decline the transaction. This result is sent back to Interchange and on to the merchant bank’s processor. The processor relays it back to the gateway, allowing the merchant to provide a real-time response to the customer.
Since customers are going to be handing over sensitive information, payment gateway providers need to ensure their applications are secure on a local and international scale. As a result, all payment gateway providers follow PCI DSS, the Payment Card Industry Data Security Standard, to ensure safety of the cardholder’s data.
Completing a transaction
At the end of a transaction, the issuing bank sends the funds to the credit card network which then passes the funds to the merchant bank and, via the process of settlement, to the merchant’s account.
It’s clear to see why a global payment gateway is necessary in a market that increasingly requires merchants to be able to accept payments from anywhere in the world. With the right gateway and security systems in place, established brick-and-mortar brands can go online and access more customers.