Basic Components of Payment Gateways

Payment Gateway Service Provider

Every payment gateway is based on several basic components that give the final shape to the payment system. Without these components, no payment gateway provider can serve the merchants. Today when every country wants to move forward towards digitization of the economy, digital or electronically-managed payment platforms have become significant.

Gone are the days of cash payments, today we have credit cards, crypto payments, bank transfers, etc. and they can be managed only with the help of a gateway. Many people start their payment gateway but are not clear about how things work and what are the basic elements. Are you also planning to enter the gateway industry? Then the understanding of basic payment system components should certainly help you make a real difference.

Here in this blog, you will learn about them and also their significance in the overall operation of a solution-providing company. If you are planning to start your own payment gateway, it’s best to memorize the following components and avoid any possibility of mistakes.

PCI compliance for fraud management

Fraud protection is the most important role of a payment gateway because without security no business can get customers. Buyers will never pay through a website or POS that has insufficient arrangements for safety.

There are several levels of PCI compliance certificates according to the annual transaction value of a business. A payment gateway should have compliance with the credit card safety rules for the industry in which the company offers solutions.

PCI-DSS levels of certificates according to the annual transaction value of merchants. Take a look

• Level 1- Merchants with above 6 million transactions annually.
• Level 2 – Merchants with above 1 to 6 million transactions annually.
• Level 3 – Merchants with 20,000 to 1 million transactions annually.
• Level 4 – Merchants with less than 20,000 transactions annually.

On 31 March 2022, the 4.0 Version of PCI-DSS was published. However, the current version will be valid until March 2024. The compliance rules may keep changing depending on the circumstances in international business conditions. Accordingly, all processors, gateways, acquiring banks, and issuing banks have to follow the same rules. You should always keep the above numbers in mind.  

Effective chargeback management

Efficient businesses can be run only through effective chargeback management. Chargebacks have always been most frightening for merchants. Here come the payment gateways to prove their worth for the businesses of low to medium to high-risk businesses. Whether it is a convenient payment solution company or a white-label payment gateway it should know how to support a merchant in chargeback management.

• Many times, merchants switch to another payment gateway because they are not happy with the chargeback management capacity of their current payment gateway. Do you want your merchants to leave you because of your inefficiency in this aspect? Well, break the stereotypes and learn from the existing renowned payment gateway like gatewayeast.com setting benchmarks with its proficient payment gateway services.
• Chargebacks are not always genuine which is why we have friendly frauds as the most common issue that business owners face. With the help of effective management of fake money-back demands, you can strengthen your merchant client.
• With the help of artificial intelligence tools and fraud detection tools, it is possible to detect customer accounts that frequently make false demands. It is impossible for a merchant to manage his business chargebacks all alone. A payment gateway has all the support systems to help merchants fight against false or fake chargebacks.

Multiple processors

Integrating with multiple processors has many benefits for the merchants and indirectly for its customers. Having more than one processor gives the liberty of a business to choose merchant accounts for account settlement. You can count the many benefits of having multiple processors.

• Merchants get a competitive transaction fee rate which saves a lot of money and the saved funds can be used to enhance business resources.
• You can process more transactions at the same time with the help of multiple processors. Also, it improves the speed.
• The payment gateways with the need to do routing to multiple merchant accounts always need several processors.
• The multiplicity of processors works as a backup in case anyone goes down due to any technical glitch, the other processors will handle the situation.
• Merchants can boost sales because when more than one processor is working, the payment experience of the customers improves and they buy more.

Vast scaling possibility

Every business owner wants to expand his business in the future and for that one needs to have a payment gateway that can integrate easily with new business operations. Scalability is the basic component of a payment gateway because that gives the merchants freedom to expand commercial activities in every sector.

• When it comes to scalability, a payment gateway should be able to fulfill the demands of new payment methods made by merchants. To start a business in a new sector, a merchant may need new payment ways such as crypto payments, and also new currencies will introduce.
• Integration with new merchant accounts is also a part of the capacity to scale. However, many solution-providing companies have their own connections to acquiring banks. But sometimes, merchants want to connect to some other acquirer. If you want to start your own payment gateway business do not forget to add the feature of scalability.
• Update on the latest technology. Whether it is fraud detection technology, chargeback management systems, payment processing, or digital currencies, you need to keep an eye on the latest version of every technology.

Conclusion

The above components of a payment gateway are unavoidable and they ensure the effective functioning of a payment solution-providing company. Anyone who is looking forward to providing transaction-management services to the merchants should have all these components.

The high-risk industry payment gateways should be more alert while working on your transaction management infrastructure. Without working on the basics, it can never be possible to manage money travel between the customer and the merchant account and the merchant. Last but not the least, all the components are necessary for the traditional run as well as the white-label payment gateway solution companies that give the platform for logo placement.