These both terms are confusing and to understand the difference between them is more confusing. This blog will answer those questions in an easy way. Many online payment processing companies offer both services to merchants. Before we dive deeper, let's understand the four important players that are involved in the online payment process.
So, the online payment process for companies would typically look like this.
But, what is the role of payment gateway and payment processing offered by online payment processing companies in this transaction? And how to differentiate between them? Well, let's understand the basics first. What is Payment Processing? It is a service given by a payment processing company that handles transactions from your customers' account and your merchant account, and it also allows customers to buy your products and services. In addition to that, payment processing for the company follows security protocols for easy and safe transactions. What is a Payment Gateway? Many online payment processing companies provide a payment gateway that transfers the payment data to the processor. It acts just like a mediator who complete the transaction cycle. It connects the processor to the merchant’s bank account and card companies like MasterCard. Most eCommerce websites use a payment gateway from a reputed payment processing company for cardless transactions. A payment gateway authenticates before forwarding the payment details to the processor. What is the difference between Payment Gateway & Payment Processing? In simple words, many online credit card payment processing companies provide the service of payment processing which is a transaction between customers and a merchant, while a payment gateway given by a famous payment processing company collects payment details of customers and send them to the processor, and then allows transaction between them. Which one does a company need: Payment Processor or Payment Gateway? Companies that accept only in-person card payments just need a payment processor. Let's look into the payment cycle here for an example:
However, many companies choose to sell products and services online nowadays and require many payment methods including cardless transactions. A payment gateway becomes necessary here. Look into the payment cycle when both, the payment processor and payment gateway are used:
Conclusion The payment processor offered by the payment processing company has a limitation to accept payment in form of in-person card payments while payment gateway opens many doors of payment options for merchants. Also Read: 5 Key Points to Check When Selecting a Payment Processing Company
0 Comments
Leave a Reply. |
Author365 Glacier Payments is a well known payment processing company which offer various payment processing solutions for small and large scale business. Archives
March 2022
Categories |