With the rise of e-commerce as a convenient way for consumers to purchase a variety of products online, many more South African retailers are setting up shop on their websites.
Security is, however, paramount. The exchange of critical personal information, especially identification numbers and banking details must be done in a secure and seamless way. Enter the payment gateway – an easy way for online retailers to enable their site users to safely purchase and pay for items or services required. Payment Gateways are the way to ensure that your online retail and e-commerce website is fully equipped to accept and process easier, efficient and secure transactions.
A payment gateway is an e-commerce application service provider that authorises payments for e-businesses and online retailers. In layman’s terms, a payment gateway enables you to make a transaction over the Internet and pay for goods you have ordered online, in a secure fashion.
The most well-known global payment gateway is PayPal (www.paypal.com). Even though PayPal was developed by a South African, PayPal does not currently offer merchant services to South African based companies. If, however, you have a bank account in the US or UK, for example, PayPal might be a good option for accepting credit cards over the Internet.
Thankfully though, our clever-headed and tech-savvy South African developers have created more payment gateway options.
In order to familiarize yourself with the arena of Payment Gateways and e-commerce, it’s important to learn some related terminology.
Here are some important terms to know before venturing into the world of Payment Gateways:
e-Commerce
Primarily the distributing, buying, selling, marketing, and servicing of products or services over electronic systems such as the Internet and other computer networks
Internet Service Provider (ISP)
An organization or business that provides Internet services and resource management to businesses and consumers.
Merchant
The person or business entity that sells goods or services to a customer.
Merchant Account
A financial institution or bank account that is used by a merchant specifically for the purpose of collecting proceeds consumer bank account or credit card payment transactions. A Card Present (CP) merchant account is used by merchants that receive payments in a physical location where payment is physically presented to the merchant by the customer at the time of the transaction. A Card Not Present (CNP) merchant account is used by merchants that receive payments electronically or in situations where payment is not physically presented to the merchant by the consumer at the time of the transaction.
Merchant Account Provider
A financial institution, or bank, that provides a financial account to a merchant for the purpose of collecting proceeds from consumer bank account or credit card payment transactions.
Merchant Identification Number (MID)
An identification number assigned to each member merchant of an acquiring organization, such as a financial institution.
Transaction
The exchange of information, goods or services in which all participating parties benefit. Specifically, the exchange of a consumer’s payment or payment information for merchandise or services provided by an organization or business.
Transaction ID (Trans ID)
A unique identification value assigned to each transaction processed through the payment gateway. This ID may be used to search for or sort transactions.
Transaction Type
The type of credit card transaction taking place. For charge transactions, a consumer is allowing a merchant to collect payment for merchandise or services rendered. However, in the case of a refund transaction, a merchant is returning funds to the consumer for a previous charge transaction.
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