Payment processing is an essential part of online business. While selling products online, we need payment processing applications to connect with the customer’s bank account and the seller’s bank account.
Here it is a product or service supplier online. There is a common doubt on payment gateway vs payment processor to find out which should be used.
For Payment processing online, we can use two methods, or if necessary, we can combine both ways. One is a payment gateway, and another one is the payment processor. The seller will choose a payment gateway or payment processor to accept payment from customers based on the business application.
What is Payment Gateway?
A payment gateway is a software or tool to collect customer details if they used credit cards, debit cards, or other wallets. A payment gateway connects both customer bank and seller bank. Perhaps, this is important to understand which is better in the battle of payment gateway vs credit card processor.
The card and customer information will collect by the payment gateway and sent to the customer’s bank. Once the customer bank verifies the details, it will respond to payment via the payment gateway. This is where you can know a better definition and address the battle of credit card payment gateway vs processor.
The gateway will do the rest; it will direct payment to the merchant bank. Also, the gateways send the response to the customers as well.
Why is Payment Gateway Better Than Payment Processor?
If you think of a battle of payment gateway vs payment processor, you should first list down your needs. An online business owner can choose a payment gateway overpayment processor for the below reasons.
- Payment gateways are easy to integrate with online stores and bill payments. It uses tools as wells as apps to accept mobile payments.
- The seller can choose self-hosted payment gateways rather than the third-party hosted gateway to accept the payment for selling products or services.
- Payment gateways are very cheaper than payment processors.
- Examples for payment gateways are Bill desk, CCavenue, PayUBiz, Paytm, etc.
What Is A Payment Processor?
Payment processor works with payment gateway, and it provides more security overpayment gateway only payments. The payment processor will connect payment gateways, merchant banks, and customers banks. It just needs more authentications to process payments seller side as well.
Payment processors will also collect the customer’s payment via payment gateway, but it uses more authorizations from the customer’s bank. The customer’s bank verifies the card details that are received.
It authorizes the processor to receive the payment and the payment processer will allow the payment gateway to accept compensation from the customers. We can use it in eCommerce stores to accept payments.
Why Are Payment Processors Best Over Payment Gateway?
Payment gateway vs payment processor – what should you prefer? The online store websites should always prefer payment processors for the below reasons.
- The payment processors always use SSL encryption to collect customer details and process the payments.
- It requires authorization from the customers’ bank to collect the payment, so it is more secure than gateways.
- While selling products online, it needs more security for customers card details to make a better choice than an only payment gateway.
- The best payment processors are Paypal, Stripe, Square, etc.
Which is The Best Payment Gateway Or Payment Processor?
Both have different kinds of security to collect and process payments from the customers. The Payment Processors are always used SSL encrypted pages to collect customer details and payment processing. The payment gateways are faster than payment processors; meanwhile, security is a concern.
The compassion of payment processors vs payment gateway has been done by its easy-to-use platform for merchant applications. We will take the installation, processing speeds, security, support from the developers, and price parameters to identify the suitable one for the business applications.
Based on the customers and business services, we can choose the payment processing methods. A small-scale business customer seller can prefer a payment gateway to accept the payment. But a business-to-business merchant needs to maintain the transaction for customers and suppliers.
So here, the best choice is a payment processor, even though it is costlier than payment gateways. In the battle of credit card payment gateway vs credit card processor, you can go with the processor.
Deployment of Payment gateway Vs Payment Processor
An online store or business service provider needed payment acceptance from the customers and clients. Payment gateways are simple to install or integrate with our business application. For example, a billdesk or payUbiz can be easily integrated into our online store service to collect payment via credit cards, NEFT, UPI, and Paytm.
In the case of payment processors like PayPal needs API integration to accept payments with gateway pages. We need to install software to encrypt payment pages will SSL to collect payments, whereas payment gateways are simple apps to collect payment via Mobile apps, UPI, and Paytm. A payment gateway is the best choice for faster and easier installation.
Speed of Payment Processing Gateway Vs payment processor
Payment processing is much faster in payment gateways. We can instantly receive payments via physical bill payment devices. Online stores can accept card payments quickly via mobile applications with payment gateways.
Unlike payment gateways, the payment processor needs authorization from the customer’s banks, so it needs some time to verify the customer’s card details with bank records. We can send just payment links via mobile, SMS and even emails to accept the payments, but payment gateway needs apps to accept mobile payments.
Even though payment processors have many steps to accept the payment from the customer point of view, they can quickly pay the amount via a simple SMS link. But payment gateway needs an application to purchase an online product.
In assessing payment gateway vs processor, payment processor is faster to find a new customer to sell the product than payment gateways. For the battle of 3rd party processor vs payment gateway, processor wins the speed battle.
Security of Payment Gateway Vs payment processor
The customer security payment processor uses encrypted SSL pages to collect the customer card details and payments. Whereas payment gateway uses less security because it uses many third parties hosted payment pages to collect payments. So there will be a change of retrieving the information from third-party applications.
Every online e-commerce store website uses different mobile applications to sell the products. They use multiple payment gateways for the convenience of all customers, and it leads third-party payment gateway to collect payments with their apps. Here the security will be a concern.
When using a payment processor, they use only encrypted pages with limited payment gateways to collect payments. So payment processors are more secure than gateways only.
Pricing and Support
Payment processors are costlier than payment gateways because they need secured payment pages, links, and gateways when it comes to price. We can use a variety of payment modes such as cards, UPI, wallets, and net banking with API-driven payment processing.
Best on the number of gateways and reporting options to the merchants, the payment processor price varied. It always needs expert support to integrate payment processors in business services.
In the case of payment gateways, it is much cheaper than payment processors. We can use multiple payment gateways with simple integration in online stores, physical devices to accept payments. The gateways are needed only one-time support for integration no needs to maintain payment records for future processing.
Conclusion Payment gateway vs Payment processor
The payment processor and payment gateways are using a different processes to accept payments from the customers. Based on the business applications, we can choose the right one to collect payments.
A payment gateway is the best for merchants to accept debit or credit card purchases from customers. Even we accept physical card-reading devices and swiping machines in retail stores to collect the payments, and it needs the payment processing pages in online stores for secured transactions.
So the payment processors are always the best choice for eCommerce business and business services.