+ Understanding the differences between payment gateways and shopping carts. | Inovio

Understanding the differences between payment gateways and shopping carts.

Shutterstock 482556811If you are considering launching an internet-only company or expanding your retail business to include online customers, you are sure to quickly realize the benefits. These days, customers appreciate and even often expect the convenience of ordering via their tablets or laptops and having goods delivered right to their doorsteps. As a merchant, ecommerce enables you to appeal to a geographically disparate set of buyers since you are no longer dependent upon physical foot traffic in a brick-and-mortar location. However, before you can embark upon your new cyber-endeavor, it is important that you understand the technological landscape. To that end, it is essential to learn about the terminology involved, including both payment gateways and shopping carts.

Payment gateways defined.

Think of a payment gateway as akin to the point of sale solution that you probably already use in your physical store. It operates online and enables you to securely authorize the transactions your customers submit for payment. It can be used both for online purchases and those that happen in your store with the help of a physical card reader. Regardless of whether the transaction is in-person or remote, the gateway does two important jobs. First, it securely sends the customer’s payment data to the payment processor. Second, it relays confirmation of payment approval (or declination), as well as any other relevant details back to your shopping cart.

Shopping carts defined.

Your shopping cart is the virtual equivalent of the physical carriage that you wheel through a grocery or big box store. It is used to store the products that you are choosing and connects to the ecommerce checkout location just as your physical cart can be wheeled right up to the cash register. Your ecommerce cart also has the capability of tallying up the cost of all the products it contains, including taxes, fees and any discounts or coupons that need to be taken into account. Once all calculations are concluded, the cart will display the grand total that the customer is expected to pay. This is the point at which the payment gateway comes into play since it is the conduit between the merchant and the payment processor.

Although shopping carts are analogous to real ones, there are some differences. For one thing, buyers can save items in their virtual cart, often for days or weeks, before making the actual purchase. Carts also may include the ability to introduce and upsell similar or supplemental products that can accompany the item(s) already in a customer’s cart.

The online shopping cart has several purposes. Perhaps most important, it offers customers a secure method of storage for their sensitive payment data. Without this security measure, most people would have every reason to mistrust the entire concept of online buying. In addition, shopping carts provide convenience for both parties. On the merchant side, retailers have a way to accept payments from buyers without them being physically present, allowing for added flexibility and business expansion. By the same token, buyers are conveniently able to pick out several items at once, and even save their selections for later. In addition, customers can see a clear, running total of all costs associated with their purchases, including sales tax, shipping charges, discounts, and coupons.

Tips for choosing your online payment processing gateway.

Above all else, you and your customers need a payment process that is fast, secure, and intuitive. The particular one you choose will, however, depend on your business’ particular needs. To clarify this complex process, there are a number of factors to consider as you make your decision, including:

  • The types of payments you will take, including credit and debit cards, and NFC contactless payments like Apple Pay and Samsung Pay.
  • The currencies you accept in your business.
  • Whether you’re better suited for a hosted or a non-hosted gateway. Hosted gateways redirect the customer away from your site for payment processing, returning them when the transaction is completed. While hosted gateways are easier to set up and integrate, they can be less appealing to your buyers. While customers never leave your website when paying via a non-hosted gateway, your business will need someone computer-savvy enough to incorporate a gateway into your existing website. 
  • Costs like: setup fees; merchant discount rates; flat charges; and charges for added support and security against fraud.
  • Security, including data encryption and tokenization, fraud monitoring, and 3D Secure payment verification.
  • The gateway’s uptime reliability and access to customer and technical support.
  • The frequency of deposits from the provider into your account.

As you might imagine, costs and fees vary widely. Consequently, be sure that you understand everything that is involved before you sign on any dotted lines.

Tips for selecting a shopping cart for your store.

Even a quick search of your options in this arena will convince you that you have numerous choices. As you sort through your options, keep in mind that there are a variety of shopping cart features you may want to leverage, including, but not limited to:

  • The ability for customers to check out as a guest or create an account for future purchases.
  • An address book to store multiple shipping addresses.
  • The ability to save products for purchase later on.
  • A shipping calculator.
  • Plug-ins to blog and social media sites.
  • The capability to customize and brand your page.
  • Tools for inventory management and tax preparation.
  • Integration with your payment gateway program of choice.

Unfortunately, every shopping cart doesn’t offer every feature. So you’ll need to use your knowledge of your unique business needs and customer base to prioritize which features you cannot do without and which you can forego if necessary.

Becoming a player on the online ecommerce stage is an exciting yet often overwhelming way to expand your existing store or launch a new one. If your endeavor is to succeed, you must take steps to be sure that every aspect of the process is seamless. That means designing a website with clear images and product descriptions, posting transparent information about all policies and charges, and offering a payment process that is smooth and secure. Since shopping online is sure to continue to be popular for many or all of your customers, enhancing their experience is a terrific way to keep them coming back while simultaneously streamlining many of your internal business processes.

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