If you are thinking about getting online to make some money or running a website that will generate income and make you some money, then you need to know that unless you already have a merchant account, you cannot accept any payments online.
While some clients can easily send you money before the service is delivered, many people are gradually realizing that the internet seems safer due to the security measures put in place by many e-commerce companies, rather than sending their hard-earned money to someone who may not even follow through on their promises.
An important part that helps facilitate online payments is a payment gateway. Payment gateway service providers essentially stand as a middle point between all financial transactions online. These do not function as bank or business accounts in themselves. Instead, they are more concerned with security and authentication.
Most payment gateway service providers help ensure that the buyer's information is secure by using encryption, verifying the data, decrypting it and sending it to the merchant's account. In short, it stands as a security guard that decrypts and payment gateways for my business encrypts the responses between the website and the buyer's credit card company or bank.
Payment gateways are important because they help reduce online fraud, speed up online payments. In the early days of online payment solutions, people would make payments and have to wait almost a week for their cards to be verified with the bank – and remember, one week was fast! Now you can place an order and have your identity and details verified in seconds. Payments are also smoother and faster thanks to these gateways.