What is a Payment Gateway and Why Should I Get One?

by Tiara Rea

Ecommerce web hosting requires a great deal of patience, but it also requires a great deal of consideration. You’re going to need reliable web hosting (check!), a shopping cart system (check!), and a payment gateway.

So what is a payment gateway? It sounds very technical but it’s more or less just a service that acts as the middleman between the payments your customers submit online and the actual funds you receive. A payment gateway processes and facilitates all the financial transactions made, allowing you to accept credit cards, checks, echecks, PayPal, and nearly every form of payment known to man. Examples of some payment gateways are Authorize.net and PayPal.

There are several features you should compare when choosing a payment gateway for your ecommerce web hosting plan, including the costs involved, fraud prevention tools, recurring billing options, and alternative payment options. With the price, many gateways charge an upfront setup fee as well as a per transaction fee, so ask for discounts or, if you’re with Lunarpages, we have a good deal with Authorize.net if you login to your account panel. ;) And as far as the other options go, making a checklist is often the best option to compare the tools and services they offer, as all payment gateways are different.

So once you’ve found a payment gateway you’re comfortable working with, you’ll need to purchase a Dedicated IP and SSL Certificate. These two things combine to secure the transactions and encrypt the sensitive payment data. Most payment gateways will not allow you to take credit card information without these two features. However, if you’re using PayPal or a similar service, you won’t need the IP and SSL cert, as all transactions already take place on PayPal’s secured, encrypted website. This is why many first-time ecommerce webmasters choose to go with PayPal to start and will work their way up to taking the payments themselves.

So good luck in your search for your payment gateway! Whatever you choose, Lunarpages can help you make that site a success.