Internet shopping continues its meteoric rise, and this year, online purchases are expected to account for 22 percent of the total, up from 14 percent last year. But it is not just growth that is happening. Consumer behavior is also changing dramatically as buyers shift from desktop to mobile.

Five years ago, shoppers tended to use their phones to check and compare prices while visiting brick and mortar shops. Many still do this, but the majority now go ahead and complete the deal from their smartphones. Mobile ecommerce sales have risen from $0.9 trillion in 2018 to an estimated $2.2 trillion in 2023. In the face of numbers like that, one thing is certain. If you have an ecommerce store, the facility to take payments via a mobile app is absolutely essential. This is usually done using a payment gateway.

Payment gateways for mobile apps

A payment gateway is conceptually very simple. It is a mechanism that allows buyers to pay for purchases directly from the seller’s app and passes the money securely into the seller’s account. The main function of the gateway is to see that the transaction is performed correctly and securely, encrypting all data at every stage.

The gateway coordinates with multiple participants, especially when dealing with cross-border transactions. These are the buyer’s bank, known as the issuing bank, the merchant’s bank and the international payment system when necessary.

First, the gateway asks the issuing bank if there are sufficient funds available for the transaction. If it gets a yes, it confirms the transaction and the issuing bank credits the funds to the merchant account. The whole process should take only two to three seconds.

Payment gateways are mostly associated with credit and debit cards. However, many also support other payment options such as e-wallets, crypto payments or bank transfers.

A payment gateway is different to a payment processor

People tend to use the phrases payment gateway and payment processor interchangeably but there is an important difference. A payment gateway has a role to play in approving or declining a transaction after it has consulted with other parties, primarily the issuing bank. A processor simply processes the transaction when it is told to do so.

Choosing the right payment gateway for your business

A reliable payment gateway takes care of all the hassle and concerns you have surrounding payment processing, and as we now understand, is more than just a payment processor. Choosing the right one involves more than just choosing whatever is cheapest. Sure, we all have to factor in cost, but the cheapest is not always the most cost effective, just as the most expensive is not always the best.

Available payments methods is an absolutely crucial consideration. Today’s customers are demanding, and if you do not provide what they want, they will go elsewhere. For example, UniPayment doesn’t just give buyers the chance to pay by crypto. It even gives a choice of different crypto options including Ethereum, USDT payments and various others.

Security is also a vital consideration. No payment gateway is going to get far unless it offers adequate security, but still check for compliance with the Payment Card Industry Data Security Standard (PCI DSS) and make sure it employs advanced security measures to protect sensitive data.

Some payment gateways come with built-in extras that are nice to have such as anti-fraud tools that can detect suspect transactions. These can be handy as every business faces fraud from time to time, and it can be a bigger cost than you think, sucking up management time that could be better used developing the business.

Ultimately, though, the most important thing is to choose a reliable partner who will be able to grow with you and your business and can support your needs now and in the future. Invest in a little time now to make the right decisions and you can thank yourself later.