The merchants or online businesses ranging from e-commerce websites to the SaaS cloud businesses can use the payment gateway to make and receive the payments. It allows providing different payment options, such as digital wallets, debit and credit cards, UPI, etc. Third-party private organizations have provided payment gateway services since the late 90s in India. With the integrated gateways, many organizations can easily accept and receive payments from customers. They are required to pay the payment gateway charges for payments disbursal to the employees and vendors. Don’t know which payment gateway should be chosen for your business application or website? Go through the below section to get in-detail information about the payment gateway charges.
A brief discussion about payment gateway charges
The charges or fees of the payment gateway refer to the incurred costs by the enterprise or business owners to provide the payment processing online based on the selected payment gateway on the website. It is estimated as the transaction amount in terms of percentages and is also varied according to the payment method used by the customers and based on the involved risk levels during the transaction.
The integration of a payment gateway into the business or website can assist in accepting the online payments while focusing on the transaction management process for maintaining the real-time bank settlement, offering instant refunds, and maintaining the operations facility.
What are the costs of payment gateways?
There are no fixed credit card prices for payment gateway providers. Different charges may be associated with each payment, but these charges are not always the same in applying for the given transactions. Most of the payment gateway or payment processing providers incur the charges along with the per-transaction percentage, as follows:
- PCI-compliance fees
- Membership fees
- Monthly account fees
- Batch fees
- Initial setup fees
- Chargeback or refund fees
- Higher charges for cards like American Express
How does it work?
The payment gateway ensures the security of the user’s sensitive data throughout the payment process. Based on the advanced encryption technologies, data safety is maintained for the data provided by the user, including credit or debit card, and bank details.
There are several components of payment gateway charges
The below-mentioned steps discuss how the payment gateway works typically:
Step 1: The order is placed after the customer submits the check-out request on the e-Commerce website.
Step 2: Then, the customer is taken to the payment gateway by the website or application, where all related data about the card or the bank is required to be entered by the user for payment. Later, the user takes into the issuing web page or a secure page directly by the payment gateway to ask for the authorized transaction.
Step 3: After getting the approval from the payment gateway for making transactions, the concerned bank verifies whether the customer account has included enough amount to lead to the successful transaction.
Step 4: A message sent to the merchant by the payment gateway. If in case, the bank replies ‘No’, the error message is sent to the customer and informs them about the issue with the bank or card. The transaction is sought from the bank by the merchant when the response is ‘Yes’ from the bank website.
Step 5: The money settles with the payment gateway by the bank and it results in settling the payment with the merchant.
Once all these steps are completed, the confirmation message is received by the customer that shows the order is being placed. It’s vital to ensure that this data is secure. Based on different payment modes like debit or credit cards, the payments can be accepted by businesses through the online payment gateway.
You should watch this documentary no mercy Mexico .
Factors that impact the payment gateway charges
By relying on different factors, most of the payment processing providers charge for payment gateway services that included:
- Interchange rate
This rate charges for issuing the credit card companies like Mastercard and VISA upon each payment made by the receiving bank through the credit card. The interchange rate is determined based on the selected payment mode, the associated risk with the linked business, and the type of card used for transactions.
- Merchant account fee
The merchant account providers charge a fee for depositing the received amount into the business bank account regularly if any business wants to accept the payments online via credit cards. Depending on the type of business and the volume of transactions, the providers will take a small transaction fee along with the interchange rate.
- Payment security
The payment gateway charges are also dependent on the usage of cards by the customers while making the payments, either through online transactions, in-store, over-the-phone transactions, etc. For instance, online transactions are more vulnerable to cyber or hacking attacks than offline in-store payments’ acceptance through the card swiping machine.
As mentioned above, the payment gateway charges rely on different factors, like type and the total number of transactions, market type, payment modes, or generated revenue by the business. It’s essential to understand the charges for different payment gateway service providers that help to make the comparison in detail.