The primary reason why you set up a virtual storefront is to make a
sale. When visitors see your products, you want them to make a
purchase. Services offered by payment gateways are very useful when
customers need to pay you for their purchases.

A gateway serves as a channel that can bring a thing from one place to
another. When doing eCommerce, a gateway plays an integral role in
making verifications and allowing credit card transactions to come
through. A payment gateway is an essential component of any online

For businesses to be able to accept credit card payments, they need to
have a merchant account. Business owners can open a merchant account
in the bank where they do their banking transactions. This type of
account is where revenue derived from credit card transactions will be
transferred after verification by the gateway.

A number of online companies offer payment gateway services for
businesses that accept credit card payments. Business owners can
choose the payment gateway provider of their choice. However, there
are companies that offer a combination of services such as those that
offer software packages that include a merchant account and a gateway
service option as well.

Setting up the Necessary Accounts

The first thing that you need to do to get started is to open a
merchant bank account and payment gateway account. When opening a
merchant bank account, make sure that you choose a bank that will
accept funds from your payment gateway account. This type of account
lets you set up payments between your eCommerce site and your merchant
bank account.

Online businesses that accept credit card payments should also have an
Internet merchant account. All funds received from credit card
payments are transferred from the payment gateway to this account.
However, funds only stay in this account temporarily as they will be
transferred to another account that a merchant designates beforehand.
Transfers are done regularly and automatically.

How Things Work

Below is a step by step account of the process involved in each
transaction. There may be a lot of steps involved but remember all
these happen in the span of just several seconds.

1. Customers will go to your site and click on a product or products
that they wish to purchase. When they are done with their shopping,
they will be directed to the checkout page to pay for the products. In
this step, they will confirm that they wish to buy the item/s that
they have chosen and they will indicate the form of payment that they
will use.

2. As soon as payment is done, the transaction will be forwarded to
the payment gateway that you have chosen. Through this service, the
transaction will be sent to your bank’s processor.

3. Then the transaction will go through the credit card’s network
which will then send it to the bank that issued your customer’s credit

4. If your customer’s credit limit is enough to pay for all the items,
then transaction will be approved. Then it will go through the same
path that it has taken.

5. Once the payment gateway gets the message that the transaction is
approved, it will inform the customer through your site. Then it will
also send information to you, the merchant.

Payment gateways are an indispensable tool if you wish to accept
credit card payments in your site. It will free you of the hassle of
processing credit card payments manually allowing you to concentrate
on the other aspects of your online business.

Jack Heape is an online marketer with over 25 years experience in
media, sales, and marketing. He specializes in assisting local
companies establish an online presence through his company LinkLocal Internet Marketing Services. Jack is the author of several ebooks
and numerous articles.