Why do I need a Payment Gateway?
Many of you have probably asked the question, “Why do I need a payment gateway in order to process credit card transactions?” This is a very good question. An online payment gateway is what allows your shopping cart to communicate with the credit card processor. If you are operating without a payment gateway, then your cart is unaware if the card is approved or denied. In my personal opinion, every ecommerce business should operate with a payment gateway, and here are the top three reasons why:
#1: You never have to see credit card information
When implementing a gateway into your shopping cart system you are allowing the gateway to manage your customer’s sensitive information (like credit/debit card number) and to process the transaction upon your command. Processing a transaction online should be very similar to processing a transaction at a traditional brick and mortar store.
When you process a transaction at a brick and mortar store does the person behind the cash register write down your credit card number and promise you that they will dispose of it properly? No, they swipe the card and never see the actual numbers. So why should an online retailer be able to view customer’s credit card numbers? The customer should go through the same process as if they were shopping at a traditional brick and mortar store. They put all of their items into their cart, enter their payment type, and are notified if the transaction was approved or denied once they have completed the checkout process. The only way this process can function like I have described is if the eCommerce retailer uses a payment gateway.
#2: Keeping the customer in the loop
With a payment gateway working in your shopping cart system your customers will be notified at the end of the order if their credit card has been approved or denied. If you do not use a payment gateway, then your customers are unaware if their card was actually processed. If you do not have a payment gateway setup and you are using Cart32’s shopping cart system, then your customers will be informed that their card was approved, because nothing is telling the cart that the card is not approved.
Processing your cards in this manner can cause confusion for your customers. On the one hand they received a confirmation email from you telling them everything was fine, but when you actually go to process the credit card you find out the credit card is declined (which can happen for a number of reasons). Now you have to contact the customer to obtain new payment information to process an order that they thought had already been processed… Confusing? I think so.
#3: Low costs – there is really no reason not to
When you process transactions yourself instead of using a payment gateway it is of course going to cost you time instead of money. If you use a payment gateway it will cost you money instead of time. Cart32’s integrated payment gateway is $10.00 per month and $0.10 per transaction. Some may look at this cost as the credit card industry just trying to “nickel and dime” merchants. However, that is not the case at all. The payment gateway software is a security feature that provides you with the ability to keep your customer’s private information private, which in return takes some liability off of you as the business owner.
These are just the top three reasons why I think that every eCommerce merchant should have a payment gateway attached to their shopping cart. Payment gateways have more functionality and power than what I have listed in this article. If you would like to learn more about payment gateways and how they work, please feel free to contact our support team at support@cart32.com.
Jada Dooling
Jada graduated from Pittsburg State University with a degree in Business Administration. She continued her education at the University of Oklahoma earning a Master’s degree in Human Relations. Jada has been a part of the Sales and Support team since April 2010.