When you start an e-commerce website, you are going to encounter a lot of new terminology, some that may even be unfamiliar to those with IT experience and those with business experience. One such term is “payment gateway”.
Simply put, a payment gateway provides a system and interface that allows you to accept credit card and possibly also electronic check payments over the web. If you have a merchant account, your bank may have provided you with a payment gateway, but even if you do not, some services provide payment gateways without merchant accounts.
Many payment gateway systems offer hosted storefronts or shopping carts on their websites, but you will probably want to integrate their system with your own site. To do this, you will need to access the gateway’s payment API. The API (application programming interface) is a portion of the source code that allows you to connect your own web applications to those of the payment gateway.
If you are using third-party e-commerce software, you will need to make sure that it supports the payment gateway that you intend to use, or that the payment gateway you choose supports your software.
Other factors to consider are the types of payment routines the gateway makes available. Some require the user to go off-site, directly to the payment gateway to make the payment, and then be redirected to your site after completion. Others provide code that allows you to seamlessly pass payments off to them without the user being aware of it.
Finally, you will also need to evaluate the financial cost of each payment gateway. Many will require a per-transaction fee as well as a percentage of the revenue. Some payment gateways also have a revenue threshold that you must meet before they will transfer the money to your bank account.