Business

Why You Should Use a Payment Gateway for Your Website

March 12, 2021

Did you know that 57% of shoppers will abandon a cart if they’re forced to wait for more than 3 seconds?

Even scarier: 80% of those shoppers won’t even return.

Customers aren’t willing to wait for payments to process. So if your online payment gateway system isn’t updated for this decade, chances are you’re losing out on a lot of customers.

The good news is that it doesn’t have to be this way: modern payment gateways now allow you to use QR codes and payment links to take customer payments, offering a seamless payment experience and helping you speed up the entire payment process. The key part of the equation? A great payment gateway. Let’s dive into that a bit more:

  1. What is a payment gateway
  2. How does a payment gateway work?
  3. Why you should integrate a payment gateway into your website
  4. Payment gateway FAQ

What is a payment gateway?

When a payment is made online, it needs to go through various hoops before reaching your business bank account: issuing bank, payment processor, card network, acquiring bank and merchant account.

Learn more about the payment process in our payment processing guide.

One of those “hoops” is the payment gateway, which is essentially the interface where a payment is completed. It captures the payment data from the customer to the acquiring bank, and ensures all credit card information is transferred securely. A payment gateway ensures that a card is valid and therefore protects you against insufficient funds, expired cards or closed accounts. The payment gateway is one of the services offered by a payment service provider.

Learn more about this in our payment service provider (PSP) guide.

Pomelo Pay, for example, is a PSP that offers a payment gateway that integrates into your business and allows you to take digital payments.

How does a payment gateway work?

When your customer pays for your products or services online, their money goes through a bit of a journey. Here’s the breakdown:

  1. Your customer goes online to purchase your product or service, and chooses from a variety of payment methods.
  2. Payment gateway technology captures the financial information (such as card numbers and addresses), and sends it to a card network such as Visa or Mastercard.
  3. Once the transaction is authorised, details are shared with the card network and issuing bank (the customer’s bank account)
  4. This information is shared with the PSP, and the issuing bank then sends the funds to the card network
  5. Mastercard/Visa take their cut and then send the funds to the acquiring bank, which is then deposited into your merchant account and then your business bank account.

Of course, this is all automated. The primary role of a payment gateway is to translate encrypted financial information from one bank to another. This is what makes online credit card gateways are integral in providing secure payment methods and preventing fraud. Essentially, it ensures the smooth transaction of funds between customer and business.

Why you should integrate a payment gateway into your website

In order to take online payments, you need to have a payment gateway. However, you don’t want just any payment gateway: you want one which integrates smoothly with your website. If not, your customers will need to go to a separate page to complete their payment, which can increase drop off rates, cause confusion and reduce security (remember, you have less than 3 seconds!).

1. Process large transactions securely

Processing payments of several thousands of pounds can be tricky. Your customer is transferring a lot of money, and they want to know the payment is secure and will reach its destination.

By integrating a licensed payment gateway into your website, your customers can rest assured that their card details aren’t being shared with any third parties and that they can see every step of the process of the money transfer. At Pomelo Pay, for example, we are regulated by the FCA, hold a PCI level 1 license and are a member of Mastercard. A great payment gateway makes processing any transaction of any amount incredibly secure and safe.

2. Increase website conversions

Getting your customers to complete their payment on a separate page often causes confusion. It’s also where you may see errors, since it’s where banks, payment gateways and payment processors need to communicate in order to process a payment. It’s a crucial moment, which is why you want to make sure it goes as smoothly as possible.

By using a payment gateway that integrates with your website, you’re keeping your customer on the same page throughout the entire process. This allows you to offer a superior customer experience and ensures the entire payment happens quickly and effortlessly. Smooth payments = happy customers who will return!

3. Track payments on one dashboard

Using several payment providers for several payment methods means you might end up with three different dashboards from three payment companies. It can quickly get confusing and difficult to keep track of all your cash flow.

With one payment gateway that integrates all sorts of payment methods, you can easily see which payment method is the most popular, where most of your income is coming in and forecast cash flow.  

Many Pomelo Pay customers are a big fan of our dashboard: you can quickly and easily see how your payments are doing from one screen, all from one hub.

With Pomelo Pay’s Connect API, you can connect your website to all our payment solutions.  This means you’re able to process high value transactions quickly and securely, enjoy a seamless payment process that increases website conversions and view all your transactions from one dashboard.

You can test it all out for free by creating a Pomelo Pay account below!

Payment Gateway FAQs

What’s the difference between a payment provider and payment gateway?

A payment gateway is part of the services offered by a payment service provider (PSP). A payment gateway only works on authenticating a payment, whereas the PSP manages the entire transaction from start to finish.

Which payment gateway is cheapest?

Pomelo Pay is one of the cheapest payment gateways on the market. That’s because our payment gateway service is free of charge, and we only charge a 1.49% transaction fee.

What else can you do with a payment gateway?

There are many other apps and platforms that can be used thanks to payment gateway integration. With Pomelo Pay, for example, you can use QR codes, payment links and an online ordering system.