How do Payment Gateways Act as a Catalyst to Drive E-Commerce Businesses?
In this age of digitalization, e-commerce is becoming a new and rising trend, and it is quite fascinating for today’s generation. The recent sanitation crisis is fueling up the e-commerce industry at a greater pace. Payment gateways are the platforms boosting the payment functionalities performed in e-commerce. Payment gateways are easy, safe, and convenient platforms to make transactions and act as a catalyst for the growth of e-commerce, utilities, retail, and several other sectors.
In the era of fast and hectic lifestyles of people, there is no time for doing the traditional way of shopping or paying bills. Nowadays, people are paying more interest in performing every possible thing online. Starting from shopping to groceries, paying electric or other utility bills to buy medicines, all these can be done just with a finger touch. The advancement in technology and the growing usage of the internet and smartphones, provide much convenience to people to help them in their daily life chores. This leads to the growth of the e-commerce industry worldwide. Apart from having a goal of providing a seamless experience to the customers, from purchasing options to doorstep delivery, every successful e-commerce industry requires an efficient payment gateway to increase customer loyalty which will consequently turn in sales and profit. Before moving forward in detail about the benefits and functionalities of payment gateways, let’s know the basics first.
What is a Payment Gateway?
Basically, payment gateways are the medium through which allows efficient execution of online transactions between buyers and sellers. It can be defined as an e-commerce solution or a tool that validates all relevant information between banks and payment gateway while performing credit and debit card transactions. Payment gateways provide appropriate information to the acquiring bank and collect responses from the issuing bank. Razorpay, PayPal, SBI, Paytm, HDFC are some top payment gateways in India.
What are the Key Benefits of Payment Gateways?
Many businesses are opting for digital platforms to accept online payments by having the aim of improving the overall performances of their businesses. Some of the major benefits of implementing payment gateways are listed below:
- Enhancing easy checkout- Payment gateways provide a swift and seamless checkout experience to customers make online shopping as easy as possible for them.
- Gives a bunch of facilities- Payment gateways provide faster payment processing, optimum fraud management, accept numerous payment options, help in integrating shopping carts, and many more.
- Helps in impulse purchase- By delivering an easy and convenient way of making payments, people feel comfortable while doing online transactions. In this way payment gateways help online businesses to increase their sales.
- Maintains high-level security- By allowing people to make fast and smooth transactions, payment gateways maintain high-quality security standards to make them feel secure while making payments. This further helps in building trust and makes businesses grab customers.
How does Payment Gateway Work So Efficiently?
Generally, payment gateways work by following three major steps – first is, collection, then transfer, and finally authorization. At first, payment gateways redirect the customer to a secure page for the authorization of the transaction. After the transaction gets approved by the payment gateway, the bank checks the customer’s account to proceed with the transaction. After a successful transaction payment gateway sends a message to the customer and the bank settles down the payment.
Why is Payment Gateway Apt for e-commerce?
Integrating a payment gateway many businesses get profitable due to the following reasons:
- Setting up a payment gateway is quite hassle-free for the merchant or e-commerce businesses that already have a website or application.
- It requires very little maintenance and therefore, is cost-effective.
- As nowadays, people are more comfortable with the handling of smartphones and various applications, so it becomes familiar and easy for them to get familiar with the usage of payment gateway.
- Most importantly, easy checkout attracts customers to opt for a payment gateway.
Future Mirror of Payment Gateway Market
With the recent outbreak of the novel coronavirus pandemic, people are taking precaution measures and are willing to make contactless payments wherever possible. This increases the demand for making online payments across various industries worldwide. The global payment gateway market is anticipated to grow at a healthy CAGR of 16.6%, by generating revenue of $67,434.4 million in the 2021–2028 timeframe.
Key Take Away Message
In today’s world, where people are lacking for me-time, payment gateways help them by providing smooth, easy, instant, secured, cost-effective, and time-saving payment options. Discount-driven e-commerce marketplaces are the bigger attraction for people to opt for payment gateways. Furthermore, the advancement in doorstep delivery infrastructure with smartphone penetration is the key component that is going to drive the usage of payment gateway in abundance in the coming days.
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