Are Payment Gateways Safe?

Are Payment Gateways Safe?

There has been this anxiety with sellers and buyers on different e-commerce platforms about how safe it is to use payment gateways. Most especially those who are new in online buying and selling businesses. The truth is this, no matter what the question is surrounding the safety of most payment gateways, they remain safe to use when set up and managed correctly. Big e-commerce websites make use of these payment gateways since their inception.

Are you still worried if your small-time online favorite store isn’t using a well-known payment option aside from credit cards? To further clear the doubts on how safe using payments gateways are, you need to understand fully well how the system works. Here are few things you should know about payment gateways:

Requirements to Becoming an Ecommerce Payment Merchant

Since e-commerce deals with buying and selling involving the exchange of money, the requirements vary. There are some criteria a merchant must meet to become a legitimate payment merchant:

  • As a merchant to be, your business model and project must be up to standard.
  • Trading and credit history of the owner must be clean. A chronic debtor cannot qualify for since he/she cannot take care of people’s money.
  • Bonds: Merchants are expected to make surety bonds of a certain amount to take care of some miscellaneous like chargebacks and refunds. The amount of bonds depends on the size of the business. The price ranges from $10,000 to $500,000 in New York and might vary by location.

Considering this particular amount attached to qualifying as a merchant it is wise to decide if to sell directly or seek for other easy ways of making sales and satisfying your customers. If you can’t afford that much money, you can join existing e-commerce sites and offer commissions to sell on their platforms or even become their affiliate.

If you become a member, you promote a product and get commissions on each sale made through your affiliate link. This is sure a good start till when you are financially stable to start yours. Aside from this, there are so many ways business owners receive payment for service rendered or goods delivered; they include remittance services, cash on delivery and credit card.

Payment Gateways and How It Functions

Payment gateways serve as a middle-man between an e-commerce website and the merchant bank which offers credit cards (Visa and MasterCard). The gateways system communicates to the bank about a transaction between the two parties involved and ensures that all transaction is encrypted and safe.

The criteria of a good gateway are the use of SSL encryption which case how secure such website is to trade or make a purchase. This is utilized for the encryption and decryption of the credit card information. This encryption is what provides safety, if not so any one with enough skill and know how can access the information and steal from the network. Another intriguing fact about payment gateway is that they available 24 hours of the day and throughout the week. This means you can make payments even at midnight or any time of the day.

This feature of payment gateways makes it very reliable and preferable than physical stores down the street. In addition to the 24 hours availability, it encourages communication and secured transaction. Unlike in physical stores down the streets where you must wait for the opening time of the warehouse before getting any item. More so using the getaway you don’t need anyone’s presence to make the purchase you just go ahead and do it rather than waiting for an attendant.

Traditional stores can never get close to e-commerce and getaway because traditional stories deal mostly with paper work and histories which some documents can get lost and may pose a significant problem. While in electronic commerce with the help of payment gateways, purchase records are online for you to access any day any time. It is more reliable and easy to make payments and very convenient for its users.

Features of the payment gateways include auto reminders that send you a notification on a daily basis about upcoming bills before the due date. This information is often sent directly to your email or even your mobile number as messages. Payment gateways retrieve lost invoices, therefore saving the customer the stress of trying to get additional copies of the document.

Security Measures Payment Gateways Offers

Payment gateways are known to be very secure during a transaction for both parties with the help of the SSL encryption. Payment gateways secure its users with a feature called digital signature. The digital signatures feature a security measure in place to prevent hackers from gaining access to vital information. Digital signatures are very efficient in preventing hackers even when they have the ID already.

Another unusual feature that payment gateway uses to secure its users is Dynamic IPs. Dynamic IPs provides one of the highest levels of security as the system detects your IP when you log in. When a different IP tries to access the account, the transaction will be denied. Payment gateways are the quintessential part of the e-commerce website that provides each customer with the maximum security they deserve during the transaction.

These are all the steps that a payment merchant takes before they can be part of an online store. We hope we cleared your doubts — happy shopping!

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