{"id":68589,"date":"2020-01-02T11:56:04","date_gmt":"2020-01-02T09:56:04","guid":{"rendered":"https:\/\/www.sage.com\/en-za\/blog\/?p=68589"},"modified":"2026-01-29T15:55:30","modified_gmt":"2026-01-29T13:55:30","slug":"choosing-a-payment-gateway-and-accepting-online-payments","status":"publish","type":"post","link":"https:\/\/www.sage.com\/en-za\/blog\/choosing-a-payment-gateway-and-accepting-online-payments\/","title":{"rendered":"Choosing a payment gateway and accepting online payments"},"content":{"rendered":"
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\n\t\t\t\t\t\t\tMoney Matters<\/a>\t\t\t\t\t\t<\/div>\n\t\t\t\t\n\t\t\t\t
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\n\t\t\t\t\t\tChoosing a payment gateway and accepting online payments\t\t\t\t\t<\/h1>\n\t\t\t\t<\/div>\n\n\t\t\t\t\t\t\t\t\t

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\n\t\t\t\n\t\t\t\t\"Ashley\t\t\t\tAshley Thompson<\/span>\n\t\t\t<\/a>\n\n\t\t\t\t\t<\/div>\n\n\t\t\t\t\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t<\/div>\n<\/div>\n\n\n\n

Are you considering accepting online payments but aren\u2019t sure how?<\/p>\n\n\n\n

Allowing your customers to pay online greatly expands your customer base. This is because 57% of shoppers say that buying online is the most convenient way of shopping<\/a>.<\/p>\n\n\n\n

While online payments are a great opportunity, they also pose some risk. Payment gateways for small and medium-sized enterprises (SMEs) are sometimes a target for cyber-hackers<\/a>, simply because SMEs do not have the budget for advanced security tools.<\/p>\n\n\n\n

Having basic knowledge of what\u2019s happening in the background of a payment gateway as the transactions are processed can help to highlight any problems the system might have. This knowledge will also assist you in making an informed decision when choosing a payments provider. Decide what security measures you want in place, to keep sensitive customer data safe while providing a quick and convenient payment method.<\/p>\n\n\n\n

What is a payment gateway?<\/strong><\/h2>\n\n\n\n

A payment gateway serves as the bridge between your business and your customer\u2019s bank account. Transactional data is securely transmitted, either approving or declining the customer\u2019s payment method.<\/p>\n\n\n\n

It breaks the payment process down into three stages, which happen in seconds:<\/p>\n\n\n\n

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  1. Authorisation<\/strong>: The customer\u2019s bank confirms that the cardholder information is valid, and that there are sufficient funds available for the purchase.<\/li>\n\n\n\n
  2. Settlement<\/strong>: The transaction funds are transferred from the customer\u2019s account to the merchant\u2019s account.<\/li>\n\n\n\n
  3. Reporting<\/strong>: Recording and detailing all transactions, including chargebacks, declines, and refunds.<\/li>\n<\/ol>\n\n\n\n

    How does it work? <\/strong><\/h2>\n\n\n\n

    A customer places an order online. Once they enter their card information, they set into motion a series of actions to verify, complete, and finalise the purchase:<\/p>\n\n\n\n

    Step one<\/strong><\/h3>\n\n\n\n

    The web browser encrypts the payment data required for the transaction. This security feature protects the data by masking it within a code that can\u2019t be easily hacked by cybercriminals. <\/strong><\/p>\n\n\n\n

    Step two<\/strong><\/h3>\n\n\n\n

    The payment processor then sends the data to a card association, like Visa, Mastercard, or American Express.<\/p>\n\n\n\n

    The customer\u2019s bank then checks the authorisation request and either approves or declines it, once it has validated the account and checked for funds.<\/p>\n\n\n\n

    Step three<\/strong><\/h3>\n\n\n\n

    The results are sent back to the merchant. If approved, the bank sends the funds through the payment gateway, which in turn sends the money to the merchant.<\/p>\n\n\n\n

    If denied, the decline communication is sent to the merchant, and a notification pops up on-screen for the customer. The customer can try again or use another payment method.<\/p>\n\n\n\n

    Choosing the best payment gateway for your business<\/strong><\/h2>\n\n\n\n

    First, you\u2019ll need to choose a payment gateway provider that can integrate with your current payment system, build your online shopping cart, and process your customers\u2019 payments much like they are processed in store.<\/p>\n\n\n\n

    Keep the following in mind when researching providers:<\/p>\n\n\n\n

    The customer\u2019s experience<\/strong><\/h3>\n\n\n\n

    Offering your customers multiple ways to pay creates a better customer experience. This in turn leads to repeat, loyal customers who will refer people to your business, which will eventually result in increased profits.<\/p>\n\n\n\n

    Functionality and technology<\/strong><\/h3>\n\n\n\n

    Your gateway provider should support the type of functionality \u2013 such as reporting and emailed receipts \u2013 that you need for your business, and appeals to your customers. It\u2019s essential that the solution can be easily integrated and that your gateway provider offers you the flexibility to do business today and in future. Providers that persistently develop new ways to improve the user experience should top your list.<\/p>\n\n\n\n

    Business location and incorporation<\/strong><\/h3>\n\n\n\n

    The location of your business and that of your provider can affect how you incorporate your business, which is something most gateway providers require. There are a different set of incorporation rules for a South African business requesting a processing service from a gateway provider based in the UK, and vice versa. In order to get yourself online quicker, make sure you know these details before you choose your provider.<\/p>\n\n\n\n

    Your business model, products, and services<\/strong><\/h3>\n\n\n\n

    Some payment processors do not support what they consider to be \u2018high-risk\u2019 businesses and services. Make sure that your provider does not put your business in that category.<\/p>\n\n\n\n

    High-risk industries include:<\/p>\n\n\n\n