How Does the Role of Payment Gateway and Shopping Cart Software Differ?

Before building an e-commerce site, it is very important to understand about the specific roles held by payment gateway and shopping cart software.

Making online payments available on the online store will require you to have both; a payment gateway and an online shopping cart. Both of these can’t work on its own and can’t operate if one of them is missing.

Often we find these two main components confusing. Hence, let’s explore what they are and how their roles differ.

What is an online shopping cart?

An online shopping cart is similar to a real, traditional and old-school shopping cart that you wheel through the physical shopping mall or even groceries store.

What you did with it in the store is the same thing that is happening when you’re using online shopping cart. The products that you want to buy are put into the cart. Once you are satisfied, you will proceed to the checkout counter to pay for your goods.

That is exactly what online shopping cart does, the online shopping cart helps you to gather the product that you want to buy. It also acts like a user-friendly interface to ease the navigation of your customer through your online website.

By using online shopping carts, your customer are allowed to add the desired products or items into the cart by using the “Add to Cart” feature. Unlike the real shopping carts, online shopping carts could save the items that your customer chose and make the payment in the future.

And, what is a payment gateway?

A payment gateway is the final stage for your customer to acquire the product. Payment gateway will act as an authorizer for the payment made online or equivalent to a physical point-of-sale terminal.

By using a payment gateway, your business online payments are secured and authorized by either approving or declining a sale. Commonly, payment gateway is used within the internet range but in some situation, it could also be used with a card swipe reader.

Your customer will also be notified instantly if their payment is approved or rejected. The seconds the online payment gateway authorized the online payment, it will send the details of the transaction to your merchant account. The merchant will notified and been given code or key to proceed the payment and approve it.

The roles of online shopping cart

1. Providing security and safety

One of the most common problem about online shopping is the risk of customer’s or merchant’s personal information getting stolen by irresponsible people or organizations. However, online shopping carts are developed to handle this kind of problem. The developers of online shopping carts are aware of this matter.

Therefore, they never stop upgrading and enhancing the safety of their online shopping carts. Providing customers and merchants the latest safety system for them to store their information and feels secured.

2. Offering convenience

Merchants and customers both can benefit from online shopping carts. For merchants, it offers the simple manner of accepting money online. This allows you to manage your business more convenience and properly.

For customers, it offers the convenience of being able to shop multiple things at one time. Not to mention it also enables customers to hold on to the products, managing it whether adding or reducing the goods.

3. Helps to measure payment results

Shopping cart have unique features and one of it is measuring the cart results for customer. Results here mean the amount of payment you will have to make after you choose the products you want.

Shipping rate calculation, taxes calculation even discounts or coupon codes calculation. All of these are calculated by the shopping cart and the end price are shown or notified to customers. This will helps customers to plan their finance and how they going to pay the goods.

The roles of payment gateway

1. Authorize transactions

Ultimately, the communication process between your website, your payment processor and the customer’s bank facilitated by a payment gateway. The transaction is initiated and feedbacks are retrieved by the payment gateway.

Typically, the process will take place in the form of approval or decline message. Payment gateway also acts as a virtual analog of a credit card terminal at a cash register.

2. Communicate with payment parties

Communications between your website, payment processor, bank and ultimately your customers are all handled by payment gateway. Payment gateway allows these communication to be done instantly and efficiently. The process that involves a transaction is passed to your payment processor through the gateway.

Your processor will interact with the bank, determining whether to approve your transaction after they checked the validity of it. The processor once again will give the feedback from the bank through the gateway. This process usually is done within minutes.

3. Managing transactions

Transactions made by either customer or merchant is not an easy thing to handle. There can be hundreds or thousands of transaction at a time. So, the role of a payment gateway here is to manage the transactions.

Gateway helps you to track the numbers of transactions while recording the volume of transactions, in a merchant portal. Aside from that, there is also a feature in which you can filter your transaction for the record tracking.

To discover how Razer Merchant Services can help you expand your payment options and increase sales, schedule a free appointment with our team today.