Key Differences Between Payment Gateway and Payment Processor
Since online sales are on the rise, companies have begun to adapt to a more digital manner of selling in the aftermath of the pandemic. With the rise of e-commerce, businesses are in search for ways to enable digital payment methods and shift to online business.
Choosing the right payment gateway for your business can be a challenge. In order to select the right payment gateway for your business, you should consider several factors. But before we start, it is important for you to understand the key definition of payment gateway and how it is different from a payment processor. You’ve probably heard these terms and wondered what they mean as a business owner. Although the two terms appear to be similar, they are not.
Keep reading to understand what payment gateway and payment processor are along with their key differences.
Payment Gateway
A payment gateway is a transaction service that allows companies, online merchants, and service providers to online payments. It validates the digital credentials before sending the payment information to the payment processor. Based on the payment processors provided by the respective payment gateway service providers enable online businesses to order to offer multiple payment methods, including debit & credit card payments, e-wallets, online net banking or FPX, and others to their consumers.
Payment Processor
The Payment Processor serves as a link between the cardholder, merchant, acquiring bank, payment gateway, and the issuing bank. It is a firm or financial institution that a merchant has selected to process online payments such as Visa, MasterCard, American Express, etc. or payments made through other payment methods (Alipay, WeChat, etc.).
For secure transactions, the payment processing company employs security measures. This reduces the possibility of fraudulent transactions. In the case of offline transactions, the payment processor service will give you a point of sale (POS) interface. Typically, they will supply the money collection infrastructure. For example, card readers and other devices.
This is where payment gateway comes in play, offering multiple payment methods and other services that enables online businesses to accept online payments in secured environment and enhance customer experiences with smooth and fast checkout processes. In conclusion, a payment gateway is most commonly used to make payments for things and services offered online. It is a channel that enables online businesses or e-commerce businesses to sell online and accept online payments via a secured environment.
Choosing a right payment gateway for your business is critical to protecting your customers’ sensitive data and maintain website credibility. Not just that, a great payment gateway simplifies & enhances your customers’ checkout processes, hence experience. They also enable you to track transactions and make significant business decisions all in one place.
That is why RinggitPay, Malaysia’s most reliable and trusted payment gateway platform, is the best option! Having 10+ years of experience in providing banking products and services. RinggitPay offers an end-to-end payment solution to make your online business journey simple and efficient that meet your growing business needs.