Payment Gateway Software Overview
What is Payment Gateway Software?
There are three major methods the payment gateway can utilize, depending on the vendor's approach and the level of security and compliance the business must support:
A form filled out on the company's own website, where the data is then sent through the payment gateway
A redirect to the payment gateway (on a separate website where the customer can fill out payment information)
A form powered by the payment gateway vendor that collects information on the company's website but connects straight into the payment gateway vendor's server
The first option is the least secure but allows for the most consistent branding and customer experience. The second option is the most secure data-wise, but also the most disruptive customer experience, since the customer has to leave the ecommerce site to input their billing information. The third option offers a happy medium, but still requires some security precautions and visual compromises, since the look and feel of the gateway module is likely to be different from the rest of the site.
Some vendors bundle payment gateways with point of sale systems (POS) for physical business locations. Others offer more comprehensive merchant solution tools, such as customer management, invoicing, recurring billing, and more. Buyers should choose a payment gateway that connects easily to their ecommerce platform; most ecommerce providers have a list of the payment gateway connectors/integrations they offer on their websites.
Payment Gateway Features and Capabilities
Most Payment Gateway vendors offer the following important basic and advanced features. The advanced features are generally only available for an additional fee.
Basic Features and Capabilities:
Processes multiple types of credit and debit cards
Processes ACH Payments and eChecks
Secure payment processing
Payment analytics and reporting
Storage of customer information
Third party integrations
Advanced Features and Capabilities:
Recurring subscriptions and billing
Software that strictly offers payment gateway services charges per transaction, which can run as low as $0.10 per transaction. Some vendors charge a recurring monthly fee in addition to these transaction fees.
More comprehensive products that are considered merchant solutions generally charge per transaction, most often comprised of a percentage plus flat fee (ranging from 2.2% to 2.9% plus $.30). Again, a few vendors will also charge a recurring monthly fee.
High volume enterprise level companies should work with the vendor to obtain custom pricing. Fraud prevention, a POS system, invoicing and other advanced features will typically incur an add-on fee in addition to the charges described above.