Payment processing is probably the most intimidating part of the whole “online selling” puzzle when you are just starting out. And this is perfectly understandable. After all, this is the part of the job – like you’re launching a new online store – when you start to process your customers’ financial information, such as credit card numbers, sensitive personal data, etc. And as an ecommerce store owner, it’s your job to make sure your customers’ data is protected first. . Fortunately, processing payments isn’t that hard to figure out once you start reviewing them. In most cases, the heavy lifting is handled by other companies, so you can focus on the core of your business. But we’ll get there.
When does payment processing come into play?
This last part is what we will discuss today. The first surprising thing about payment processing is that it works independently of your ecommerce store. This is a completely separate system / system that are only activated when your customer is ready to pay.
Think of it this way:
When running a standard ecommerce store, you have your main store platform / system (like Shopify or Woo Commerce) to run your store’s website – showcase your products, let customers browse and place orders. Then, the actual payment processing usually takes place off-site. Your store only connects to the payment processing mechanism and sends all the essential details to get it executed.
This is done this way for two reasons. First, it’s a much more secure model. In it, the payment processing platform should be concerned with security issues and ensure the security of transactions. Without this external payment processing, all of this work would be up to you. The second reason is that various mechanisms, rules and regulations regarding payment processing online gaming tend to change from time to time, and it would be difficult (if not impossible) to follow them if you did it yourself. Again, you have the payment processing platform that does this job.
Finally, it is also a more reliable configuration from the customer’s point of view. For example, I’m sure you’ll be a lot more confident entering your credit card information through PayPal than at some random online store that you don’t trust. Now all things considered, the main benefit of this offsite setup with payment processing is that you, the store owner, just don’t have to worry about this type of credit card and can just leave it behind to professionals. While I’m at it, it’s also worth bearing in mind that in some setups all three elements are hidden under one company. In other words, the store owner usually does not have to deal with three separate entities, but can work with a single company acting as such.
What is a payment gateway?
A payment gateway is an intermediary between your online store and the payment processor that receives payment from your customer. When a customer enters their payment information on your site (it could be their credit card number or some other payment method), the payment gateway securely sends that data to the payment processor.