Gateway Accounts for Internet Payment Processing

This article is all about the gateway account basics. Think of this is a few things that you'll want to know before getting setup with a new account. This type of account is typically used to facilitate the transactions that take place between the customer inputting their credit card information on some website's shopping cart checkout screen and the merchant bank who processes the credit card transactions.

A gateway is the software that collects the transaction information and submits that information to the merchant bank so that the funds can be paid by the credit card bank of the customer or individual using the credit card to the merchant bank, then a deposit to the bank account of the merchant so that the transaction can be completed. Of course, this can be compared to a regular physical terminal which does the same thing, just through a different method.

In addition to getting the transaction information from your shopping cart to the bank for processing, most gateway accounts also have what they call a "virtual terminal". This is the ability to login directly to the gateway account and charge a credit card without having your customer or you, for that matter go through the shopping cart checkout process. This works very well for both charging credit cards in the event of a phone in order, in person order as well as when you as a business owner will need to reverse a charge. This is all easy to manage from within this virtual terminal.

The fees for the gateway account are typically around $.05 to $.10 per transaction, about $15 or so per month and a setup of around $100 or so. Of course this will vary based on the pricing of the reseller, but with most gateways, it doesn't matter where you get the gateway from as the provider is indifferent to who setup the account and will usually provide the same service no matter who the reseller was. Don't get too caught up in the fees, but make sure that you're getting a good deal. If you have a high ticket amount, the per transaction fee represents an extremely small part of the overall fees, so work on keeping your monthly fees lower. Try to keep your overall cost of processing transactions down.

As there are several different "layers" of credit card processing and several entities involved in the process, I'll keep this simple. Most gateway accounts are compatible with only certain payment platforms. There are several larger payment platforms in the US for which most gateways are "certified" or able to send transaction information to. If the gateway is being advertised by the merchant account company you've selected, you shouldn't have any problems getting setup and won't even need to worry about the payment platforms. However, if you are using a lesser known gateway provider that is only certified with certain types of payment platforms, you may need to double check with your merchant account that they can setup accounts on a compatible platform. Again, this doesn't affect most merchants and unless you are using a custom coded solution, you're very likely to end up with a competitive gateway that will be very compatible with any merchant account provider out there (such as Authorize.Net).

With a gateway account, there are some providers who have an option to process the transactions using a USB reader. What this does is allow the transaction to be processed at a "retail" rate because the card is physically present at the time of the transaction as demonstrated by the fact that the magnetic strip was read instead of just the credit card number. This doesn't work for all merchants, but if you are doing a good percentage of your transactions live, at tradeshows or a storefront as well as via the internet, this solution may work well for you and save you money in the long run. These readers typically cost around $50 to $70 or so for the basic ones and make sure your gateway company allows this type of transaction. This also means that you setup your account with your provider as a retail account as well, not an internet account. This is the only way you'll get those lower rates.

There are some instances where you can bypass the gateway altogether and submit transaction information directly to the payment platforms for processing. This is typically reserved for companies that process a LOT of transactions. The reason being is because in order to get to the point where you don't have to go through a gateway, you'll need to have your setup audited by some 3rd party auditor that will allow you to go through a certification process to where you can be "verified by Visa" and Mastercard has a similar program I know. This process is not overly difficult, but requires some extensive programming, certification, and of course there is a greater degree of liability as you know maintain the customer transaction information on your server where previously this may have been stored on the servers of the gateway company. There are high fines or fees for any credit card information that is compromised including a fine of up to $10,000 per instance. So, you can see that coding directly to the payment platform has its costs and risks.

Getting setup with an internet merchant account typically includes the gateway account as well. The main concerns that you may have is which gateways are compatible with your shopping cart. If you can narrow down this list to your top 2 or 3 gateways, you'll know where to begin your research to compare gateways both cost and features / benefits. If you have questions, you should also have some method in place to contact your internet merchant account provider to ask him or her about your options. This is a relatively easy part of getting setup and should be very straightforward. Good luck in your efforts and best wishes with the success of your business.

Brian Armstrong has been setting up merchant accounts for over 7 years for businesses. If you would like to find out more information about ecommerce merchant accounts, you can visit Brian's Youtube channel by clicking here.