A credit card payment gateway, sometimes referred to as a virtual terminal, is a third-party merchant powered payment solution which enables a company to accept debit and credit card transactions over the internet. It is a connection between your company’s Point of Sale (POS) system and a remote service provider. Payment gateways are standard when direct communication with the merchant is impossible, and they can provide all necessary functionality for accepting credit and debit cards, with minimal customization required.
This type of system offers the most flexible way to process online credit card transactions. Credit card payment gateways take care of all the details from processing the credit card until it reaches the customer’s wallet. This processing includes both the data on the credit card and the details of the physical card. The advantage of a hosted processing system over a physical one is that customers can use their credit cards from anywhere without carrying cash. Web-based APIs, also called integration tokens, make it possible to integrate all sorts of electronic billing systems, such as e-commerce sites, web applications, web store applications, and even social network accounts.
Some companies may not be able to provide a fully integrated solution. In such cases, an independent third party company may be contacted to provide the necessary components. Examples of components available to a host- provider include online merchant accounts, which will process card payments from the customer’s website. These accounts are normally hosted on a secured server and require a minimum deposit before installation. Payment gateway software is also provided by a hosting provider, usually for a monthly fee. This software can be used independently as well as being included within a hosted solution.
In contrast to a physical credit card payment gateway, a virtual service provider does not have a relationship with a bank or any other financial institution. Customers pay using a card, and the payment gateway acts as a go-between for the customer and financial institution. The provider does not maintain a physical inventory or take on any of the responsibilities traditionally associated with processing credit cards. Rather, the provider simply acts as a communication link between the financial institution and the end-user. All information is encoded and encrypted before it is transmitted to the proper destination.
Many businesses and consumers rely heavily on online payments. Virtual credit card payment gateways offer a fast, safe, and convenient way to process payments online. Consumers enjoy cost savings, security, and a hassle-free way to make secure online purchases.
