3 credit card gateway myths busted
Maybe you’ve heard of credit card gateways, but you aren’t quite clear what they are. Basically, a credit card gateway is a piece of third-party software that a business uses to process card transactions. Instead of having to implement all of the necessary software, hardware, servers and security protocols themselves, businesses use a separate payment gateway to facilitate secure transactions. There is a lot of confusing terminology and vague information surrounding payments—and credit card gateways are no exception. We’re here to debunk three of the most common myths about payment gateways and technology.
Myth #1: My small business can’t afford to use a credit card gateway.
Credit card gateways are actually fairly affordable. In fact, it’s usually more cost effective and less time consuming to use a payment gateway than to research merchant services providers, apply for a merchant account, and implement the system. Merchants can save money by avoiding cancellation fees on contracts with current providers because a gateway allows current processing relationships to remain intact.
Payment gateways also allow merchants to attract customers they may not otherwise by facilitating easy online payments. A payment gateway can offer a quick, streamlined way for a small business to begin accepting credit cards online without investing in additional software or hardware. Additionally, merchants don't have to wait to afford the latest payment technologies to take advantage of them. Many payment gateway providers stay on top of new innovations and provide automatic updates to keep software current. Time is money, and a credit card gateway can help small businesses save both.
Myth #2: Credit card gateways aren’t very secure.
Credit card gateways must abide by the same security measures as other entities that process, transmit and handle sensitive card information, and are required to follow the security mandates set by the PCI (Payment Card Industry) Security Standards Council to ensure that customers’ data is protected throughout the lifecycle of a transaction. Failure to comply with PCI mandates can result in heavy fines and fees if a data breach occurs.
Using a credit card gateway can help protect a business because the gateway is responsible for the secure handling of customers' sensitive data (note that using a secure gateway is just one piece of PCI compliance for merchants). It's important to be sure the gateway you choose uses secure payment technologies such as tokenization (which protects data at rest and allows for secure post-authorization services such as tip adjustment) and encryption (which protects data in transit throughout the transaction). Using a credit card gateway alleviates much of that burden of security and storage of sensitive data.
Myth #3: I don’t want to use PayPal, so there aren’t very many other credit card gateway options.
These days, there are dozens of payment gateways from which to choose. Your business certainly isn’t limited to PayPal if you want to accept credit cards online. Here are some questions to ask when you’re deciding which gateway to choose for your business needs:
- Is the credit card gateway supported on the eCommerce platform already in place for your business? (Obviously this isn’t as much of a concern if you’re just building your online marketplace.)
- Does the credit card gateway handle the payment methods that your customers (and your desired target customers) use?
- Do you want your customers to enter their payment details directly on your site, or are you okay with them being routed to a third-party site for this step of the checkout process?
- What are the fees and what can your business afford?
- Will you be locked into a contract? And if so, can you break it if you need to switch providers?
Today's merchants have more (and better) options for credit card gateways than ever before. Without requiring a merchant account, a payment gateway gives merchants an easy, affordable option for accepting payments both in-store and online. It's important to research options and choose the one that offers the features, security, and ability to upgrade that will benefit your business most.