In our last blog post, Part 1 of “What You Need To Know About Payment Gateways,” we covered the basic essentials of what a payment gateway is and what purpose it serves.  To summarize, a payment gateway is the link that connects your website to your merchant account at your bank—it handles secure processing of your customers’ financial information and relays the payments right to your bank account.

While it is technically possible to skip the payment gateway all together and connect right to the financial institutions’ payment processing networks, doing so would be extremely cost prohibitive, due to the extreme degree of custom interface programming and the levels of access required.  Payment gateways have been created as a solution—a middleman—to this process.

The Step-By-Step Payment Process

In a typical payment gateway transaction, the process works in several different steps.  Let’s take a look at the step-by-step payment process from start to finish:

One: Your customer provides their payment details, including the credit card/debit card information necessary.

Two: The provided information is SSL encrypted and securely submitted by your e-commerce web server to your payment gateway.

Three: Your payment gateway service transmits this information securely to the processor of your merchant bank.

Four: The processor for your merchant bank passes the information along to the credit card network.

Five: The credit card network forwards the information one more time to the correct issuing bank of the customer’s credit card for approval and processing.

Six: After the cardholder’s issuing bank has made the decision to approve or decline the transaction, that information is now routed in a reverse path to the credit card network, merchant bank processor, and finally, back to your payment gateway.

Seven: The payment gateway sends the final results of the transaction back to your e-commerce system on your web server with the appropriate approval or decline status.  This enables a final confirmation to your customer in near real time.  Steps one through seven typically take place instantaneously.

Eight: Now that the transaction has been approved by all financial networks and banks involved, the settlement process of actually depositing the funds into your merchant account are handled within their own network, usually within a couple of days.

What do you think about this process?  If it seems rather complicated, that’s because it really is.  And this is another reason why using a dependable payment gateway to intervene and expedite the process on your behalf is downright essential.

What Payment Gateway Does Sleepless Media Recommend?

It’s a good question.  Here at Sleepless Media, we prefer to work with Authorize.net, and here’s why:

• Authorize.net integrates very nicely with most open-source and custom e-commerce software systems that we use on our customers’ websites.

• This payment gateway is very professional and reliable—one of the top in the business for sure.

• Using a payment gateway like Authorize.net on your website appears much more professional than using other third-party payment collectors.  The difference in conversion rate when using professional payment processing is a clear advantage.

• Their setup and transaction fees are very competitive (and often amount to be lower in cost than receiving payments from a third-party service would end up being).

There are additional reasons why we recommend Authorize.net to our customers for a majority of e-commerce applications that we work on—please just give us a call if you’d like to discuss the options and advantages in depth.

Remember, payment systems are probably one of the more complicated components of an e-commerce website.  It’s not that they’re all that difficult to work with or understand, it’s just that most folks just want their shopping cart and payment process to work—without paying too much attention to what the best available option actually is and why it’s best in the unique circumstance it’s being used.

We want to help you choose the best possible payment system for your new website!

It’s always a good thing to know that you have choices!  With that said, choosing the best online payment processing solution for your website can be a complicated decision to make.  Let’s take a look at two of the most popular options—Authorize.net and PayPal.

The 30 Second Version…

Using Authorize.net as a payment gateway will make your site look more professional and it scales really nicely with even the largest e-commerce shopping cart deployments.  PayPal is generally more complex to integrate and use, but it does offer a baseline solution to those just offering one or two products for sale on their website.

But There’s More To The Story!

First of all, we need to discuss exactly how both of these systems work.  Authorize.net, a payment gateway, provides the integral link between your website, your customer’s credit card, and your merchant bank account.  You’ll still need to have a traditional merchant account to use it—it’s just what enables your traditional merchant account to work with your website.

On the other hand, PayPal is a third party payment processor.  No merchant account is required on your behalf—they accept just accept payments directly from your customer, take their percentage and allow you to withdraw the remaining funds from your PayPal account at your convenience.

Side-By-Side Benefits & Disadvantages:

Authorize.net

Payment gateway that connects your website’s e-commerce software to your credit card merchant account.

Fees:

Per quote.  Using a payment gateway and a merchant account will involve both transactional fees and monthly fees.

Benefits:

• Offers fraud protection.
• Allows you to use the merchant bank of your choice (or your existing merchant account) and receive all of the benefits of doing so.
• Simpler & fewer steps for the customer to complete a transaction.
• Plug and play integration with most top line e-commerce software.
• Negotiable fee structure becomes more and more attractive for higher volume sellers.
• Many customers are more apt to trust merchants with their own merchant accounts (because of the requirements merchants are obliged to abide by).

Disadvantages:

• Certain financial requirements (such as having good credit) are a must for being approved for a merchant account.

PayPal

3^rd party processor collects payments on your behalf for a fee.

Fees:

There is no monthly fee to use PayPal, just a per transaction fee.  This amounts to $0.30 plus 1.9 to 2.9% of the transaction amount.

Benefits:

• Offers fraud protection to both buyers and sellers.
• Gives your customer a trusted name to process their payments—those familiar with the service can assume that PayPal will stand behind them in specified circumstances.
• There are very few restrictions on who is allowed to create an account and begin accepting payments.

Disadvantages:

• Processing a customer’s payment through PayPal adds an extra step to the checkout process—and the opportunity for the customer to click away from finishing the transaction.
• Extra steps are required to claim, transfer, and account for money that’s been paid to you.

In the end, we definitely recommend going the Authorize.net route whenever possible.  You’ll certainly benefit from the professional image that corresponds with its seamless integration into your website’s e-commerce platform!

Authorize.net is the #1 payment gateway used in e-commerce websites to take online payments and we use this gateway on our e-commerce web development projects almost exclusively. Sleepless Media is an authorized Authorize.net reseller and offers this service as a convenience to our clients.

To sign up for an Authorize.net Payment Gateway online, please click here.

You’ll need to create a Login ID, and then sign in with the ID and password to start the online application process.

If you prefer, you can also download the application form and fax it in to apply. Just download the Authorize.net Application Form. (PDF)

Once you’ve downloaded the application form, you must fill it out based on your needs, and fax it directly to authorize.net at (801) 492-6546. If you need any help filling out the form, please contact us.

For more information on Authorize.net products and services, please visit their website at www.authorize.net.

We use authorize.net exclusively as the payment gateway in both our osCommerce and custom e-commerce carts. Sleepless Media is an authorized Authorize.net reseller so please contact us if you are interested in signing up.

To sign up for an Authorize.net Payment Gateway online, please click here.

You’ll need to create a Login ID, and then sign in with the ID and password to start the online application process.

For more information, visit their website at www.authorize.net or contact us with any questions or comments.

Once you start the process of having Sleepless Media design and develop your very own E-Commerce website, your going to need a Merchant account so your customers can pay you for your products or services. Many retailers already have a merchant account which they use to process credit cards manually in their physical  locations. If this is the case for you, you can use your existing merchant account for your online sales as well. If your just getting started and need a new merchant account or want to compare the rates of your current merchant services provider, Sleepless Media partners with Prolific Payment Sollutions to give our customers access to the best rates and customer service available when it comes to payment processing.

Here is a little background on Prolific Payment Sollutions.

We can now offer you the most competitively priced credit card processing rates in the industry.  Whether you require payment gateway processing or a credit card machine for your store, we are now your one stop shop.  Prolific Payment Solutions’ rates are up to 33% lower than PayPal and other ecommerce providers, and up to 20% lower than major banks. Prolific not only offers the most competitive rates in the country, they also offer 24/7 client support, 365 days per year.  Prolific prides itself with offering the best customer service and support in the country, and assures a simple and swift transition.

Now is the best time to start saving money by switching to Prolific Payment Solutions.  Did we mention that Prolific does not have any application, set up, reprogram or annual fees?  In other words, there is no cost to start using Prolific Payment Solutions.  Prolific also offers gift cards, business loans, check processing/verification and many other services.

Benefits and Services offered by Prolific Payment Solutions

•    Credit/Debit Card Processing:  Prolific Payment Solutions supports all major payment types, including Visa, MasterCard, Discover, American Express, Diner’s Club and Voyager Fleet Club.

•    Get Paid Quickly and Easily:  Your credit card transaction payments can be directly deposited into your specified bank account within 24-48 hours.  Unlike many of our competitors who hold your funds up to 10 days.

•    Automated Recurring Billing:  With reoccurring billing integrated into your website, your customers can setup subscriptions or membership renewals for your organization automatically. Your customer’s payments will be processed according to the billing interval and duration set.

•    Virtual Terminal Set Up:  Begin accepting credit/debit card and check purchases in person or over the phone without the need for additional hardware.  You simply log on to the secure virtual terminal site and begin accepting payments.

•    Point of Sale Integration:  Take advantage of the lowest rates in the industry with the quick and easy integration of Prolific Payment Solutions with your current POS system.

•    Hardware Purchase and Rental:  Prolific Payment Solutions can provide you with the hardware necessary to allow you to start accepting credit cards and checks right away.   We offer wireless terminals, pin pads, terminals, PC processing software and check readers.  Transitioning from another provider?  Our support team makes the process fast and pain free.

Prolific offers many other services

•    Cash Advances:  Prolific Payment Solutions can help when additional working capital is needed.  Applying is free and approval comes in 5 days or less.

•    Gift Cards & Prepaid Cards:  Our gift card programs are specifically customized to meet your many needs with standardized designs or fully customized cards.  Use your current point of sale unit to easily activate, redeem and reload the cards.  You also have access to real time reporting.

•    Check Processing &Verification:  Processing checks is simple, fast, and efficient through the multiple check programs offered by Prolific. These programs help reduce the cost of accepting checks as well as minimizing the risks involved.