What Are the Risks of Not Using a Payment Gateway?

Todays’ customers expect top notch services from any business out there. That is why it is so important for business owners to research and invest in new ways of keeping clients satisfied. One of the ways of doing so is by offering them multiple payment possibilities all the while making sure that their sensitive information is looked after. For some owners that means becoming an American Express merchant while for others it all boils down to choosing the right payment gateway.

What Is a Payment Gateway?

Commerce has evolved over the years, and new technologies have been invented in order to help businesses grow and expand. What was once a cash only area, today has expanded to include new and innovative ways of accepting payments. From swiping credit cards across a terminal to making payments using only a phone and an internet connection, customers across the globe can now buy things more easily than ever before. But keeping up with this ever evolving trend doesn’t come by accident. Business owners have to do some serious research and understand why they need to invest in new technologies in order to keep their clients happy and their businesses growing.

A first step to understanding how the new era of payments works is understanding what a payment gateway is. To put it simply, the gateway is a piece of software that enables all the parties involved in a transaction move money around. It works by connecting the client with his bank account and with the businesses account. The gateway makes it safe for information such as credit card numbers and transaction authorization pass between these parts. These gateways are an essential part of any e-commerce business because it replaces the old PoS system and adds an extra layer of security for each individual transaction.

But, as in all areas of almost any industry, there are more than one option when it comes to choosing a gateway. This is where things might get a bit tricky and where most business owners might find themselves scratching their heads without the proper research. Choosing a gateway isn’t just a matter of going online and simply clicking on the first link you find. You firstly have to understand that there are more types of gateways out there and it might take some time to figure out which one is right for your business. The three main types of gateways are:

  1. Redirecting gateways

If you have a small business, then this type of gateway might be the right one for you. They work by redirecting a customer, that is ready to pay for the products and services they chose, to a platform such as PayPal or Google Pay. The beauty of these gateways is that they use the stronger and already tested security measures of the big payment platforms. That way none of the clients’ information is stored directly with the business he bought from and so the business isn’t liable for any data breaches that may occur.

  1. Checkout on site, payment off-site.

This second type of gateway uses a two-prong approach. It lets the customer check-out his shopping on site but then redirects him to a payment platform in order to make the actual payment and complete the transaction. This way customer data is once again protected by the security protocols of the payment platform and is not stored on site.

  1. On-site payments.

For businesses that have already reached a certain level, and want to make sure that the shopping experience for each customer is a good one, then you can integrate a payment option right on-site. Although you can supervise each step of the payment process you should know that a payment gateway like this one takes some serious investment in technology and security measures.

The Risks of Not Using a Payment Gateway

Any business owner that understands that the future is in e-commerce will tell you that there are some serious steps you have to take in order to get the most out of your business. That means that ignoring trends and not investing in new technologies might cost you more than you actually save. One of the biggest risks of not using a payment gateway is that you will lose clients. Everybody wants a safe and easy way of doing business, and that includes making payments easily from any place in the world. Any business that doesn’t understand that will face client loses and a decrease in transaction volumes.

The second biggest risk of not using one of these gateways is gaining a bad reputation. Both among customers and other businesses. People value their information and want to know it is kept safe. Not using a gateway in order to do that will only make a business seem untrustworthy and will make clients and other businesses avoid it. And having a bad reputation is one of the worst things that can happen to any business.

How Is an American Express Merchant Different from the Others?

A lot of businesses might not understand what is the difference between an American Express merchant and any others. Well, the difference is quite simple. American Express prefers to keep its clients safe by using a closed loop network. This network is founded on the simple principle of eliminating any unnecessary third-parties that might pose a danger to client data. This means that, unlike with Visa and MasterCard, no merchant bank is needed. An AmEx merchant has its merchant account opened directly with American Express. This in turn might lead to some higher costs, but it makes things safer for everybody involved.

One of the biggest advantages of being and American Express merchant is that data leaks are minimized and client safety is better ensured. Also, the entire payment process is streamlined, helping merchants get their money faster than before.

Because being and American Express merchant meant some extra fees and charges, lots of businesses simply avoided accepting Amex, but since the introduction of Amex OptiBlue, more and more people are starting to use and accept American Express. Also, in the world of payments and payment processing, American Express is a symbol of quality and any business wants to be associated with such a symbol.

How to Become an American Express Merchant?

Although a more exclusive club than others, becoming an AmEx merchant isn’t all that hard. It might take some getting used to, but the process itself is very simple. The instructions outlined on their site can help anybody that wants to work with this prestigious financial institution.

  1. First step to becoming an AmEx merchant it to fill out an online form on their website where you will have to give some basic information about your business.
  1. The next step will be selecting the right type of account in accordance with the business you have.
  1. After doing that, you will be required to provide further information, both personal and business related. Then Amex will send you a personalized estimate.
  1. All you have to do after receiving the estimate is to choose if you agree with it and then further information and instructions will follow.


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