Why don't payment processors also offer gateways? 🤔

 

The expanding market for online payment methods has resulted in an increase in the number of payment processors that are made available to companies. However, why don't these payment processors also provide gateways to their customers?

Today, we will investigate the factors that led to this result and talk about the potential repercussions of offering payment processor and gateway services simultaneously.

What is a Gateway?

A gateway is a service that enables companies to accept payments from customers via credit cards and electronic checks. These payments can be made by the customers themselves. Typically, gateways will supply both a merchant account and a payment processor. A merchant account is a specialised bank account that enables businesses to accept payments made via credit card. Payment processors are responsible for processing transactions and transferring funds to merchant accounts. Gateways are frequently utilised by companies that do not wish to establish their own merchant accounts or payment processors and therefore seek an alternative. Instead, they may choose to outsource these services through the use of a gateway. This could be beneficial for companies that do not have the time or resources necessary to set up their own merchant account or payment processor. Additionally, it can be useful for companies that want to avoid the hassle of dealing with multiple providers at the same time.

Utilizing a gateway affords one with a number of benefits, including the following:

1. Convenience: The process of accepting electronic check payments and credit card payments can be made much easier with the help of a gateway, which can save you both time and trouble. 2. Cost Effectiveness: Setting up your own merchant account or payment processor is an unnecessary expense that can be avoided by using a gateway, which can save you money. 3. Flexibility: A gateway can provide you with more flexibility in how you accept payments from customers, including credit card payments and electronic check payments. You might, for instance, be able to use a gateway to accept payments through your website, over the phone, or in person, other payment methods included. 4. Security: A gateway can offer your company an additional layer of protection by encrypting sensitive information and storing it in a protected database.

Why don't Payment Processors also offer gateways?

There are several reasons why payment processors do not provide gateways for their customers:-

• Developing and maintaining gateways is an expensive endeavour.

• In order to properly install and use a gateway, a significant amount of technical knowledge is required.

• It is not uncommon for payment processors to have contracts with acquirers that prevent them from providing gateway services.

• Considering that the majority of payment processors already have an established relationship with a gateway provider, there is no reason for those payment processors to duplicate the functionality that is already available. In a nutshell, payment processors typically do not offer gateways due to the high cost and level of complexity associated with doing so. Instead, they collaborate with a reputable gateway provider that possesses the necessary knowledge and infrastructure to be able to provide a payment processing solution that is both secure and dependable.

The Benefits of Payment Processors Offering Gateways.

If you are a merchant, you are likely always looking for ways to improve the effectiveness of your payment processing while simultaneously streamlining it. One option for accomplishing this is the use of a payment gateway. A gateway gives you the ability to quickly and safely process your customers' credit card and electronic check payments, as well as accept those payments from your customers.

Utilizing a gateway offers a multitude of benefits, including the following:

1. You will experience a reduction in the amount of time spent processing payments. 2. You are able to take in payments from customers located in any part of the world. 3. The payment gateway will initiate an immediate deposit of the funds into your account, which will result in your payment being processed more quickly. 4. Because the gateway will check the information provided by the customer before authorising the transaction, you will have a lower chance of falling victim to fraudulent activity. 5. You have the ability to provide your clients with additional payment options, including credit cards, debit cards, and electronic checks. 6. You will only need to visit one location in order to keep track of all of your transactions. 7. Additional features, such as recurring billing and invoicing, are offered by some payment gateways, and these features can help you save even more time and money. Think about implementing a gateway into your payment processing operations if you are searching for new ways to enhance the efficiency of this process. It's possible that this will be the missing piece in the puzzle that will take your company to the next level!

Conclusion

It should come as no surprise that payment processors and gateways are indispensable components for any company that intends to process payments online. Despite the fact that payment processors do not typically provide gateways, there are a variety of third-party service providers available who are able to fulfil this requirement. Businesses are given access to safe and dependable gateway solutions as a result of their assistance, which enables the businesses to accept payments from customers in an easy and hassle-free manner. In the end, this makes it possible for them to run successful ecommerce operations without having to worry about the possibility of problems associated with the processing of customer payments.