When you go shopping and use your credit card, with just one swipe of your credit card through a point-of-sale terminal all your purchases are paid for ! Because of credit cards consumers can now easily pay for anything from merchandise to services. Most retailers have expanded their business immensely by allowing credit card payments .

What about retailers and merchants who do their business online? How can internet merchants accept credit cards online? It would be too impractical to go to each customer’s house just so they can swipe their card and too expensive to install a point of sale device in each home. This defeats the purpose of doing business online.

The answer my friend, are payment gateways. Payment gateways and merchant accounts allow internet merchants to accept credit cards online without a physical point of sale terminal. Payment gateways are like the internet version of your point-of-sale terminals.

Payment gateways allow online merchants to accept credit card payments over the internet. They check to make sure that the cardholder has enough credit and cover the charges. They place this amount on hold so that the customer would not be able to spend the money before it gets transferred to the bank of the seller’s merchant account.

People often have the misconception that a payment gateway is also a merchant account.  Merchant account service providers act as a link between your business bank account and the payment gateway. When somebody purchases from your online store the payment gateway processes the credit card information and the money is transferred to the merchant account. It is the merchant account service provider that transfers the funds to the banks.

When choosing a payment gateway, make sure that it is PCI compliant. Also ask about their customer support, make sure that they can easily be contacted.  You’re talking about your money here and if anything happens you would want to talk to people who would be able to help you.  It would also be good to check if the payment gateway can be easily be integrated with third-party solutions you are using like your shopping cart.

Using a payment gateway will allow you to gain more customers. It will also give your different security features so you will not be the victim of fraudulent purchases. With payment gateways you will be able to easily accept payments and boost your sales.