7 Benefits of a Payment Gateway Software
Over the years, the payment processing industry has changed drastically and become so dynamic that sometimes merchants and other small businesses may find it difficult to keep up with new standards and best practices in this industry.
When using payment gateway software, there is no need to manually enter credentials like account details, name, etc., saving valuable time and eliminating the possibility of human error. Other than making payment much quicker and safer, payment gateway software has many other benefits. Let us find out what those benefits are.
But first, let us know what payment software does.
How Does a Payment Gateway Software Work?
A payment gateway is a technology that transfers payment data from the customer’s account to the acquirer. Payment gateway software allows retailers to make payments in any business category. With payment gateway software, the payment transaction data that is derived from credit/debit cards or other electronic payments automatically flows into a business’ accounting or ERP system whenever a sale is made. It is just like how the money from a transaction is directly deposited into a business bank account.
Through encryption, it is ensured that sensitive information such as credit card numbers or any other information entered on an e-commerce website or virtual terminal is securely passed from the customer to the merchant.
Benefits of a Payment Gateway Software
- Saves Time
A payment gateway software can offer small and medium-sized businesses many benefits, but the greatest benefit is that it saves time. Individuals don’t have to waste their time by manually entering credit card numbers and other electronic payments in accounting software. What’s even better is that it is beneficial not only for the users but also for the businesses.
The batch information, which used to be sent from the payment processor and needed to be recreated, now appears immediately in the accounting software with the payment gateway. While earlier one had to put in transactional data manually, now it flows directly into the system without the need for any interaction from employees or business owners.
- Secure Transactions
Payment gateways use industry-standard encryption to protect sensitive data. Also, the customer need not put in the information manually. This protects both the merchant and the consumer from fraud.
- Reduces Human Error
The human factor in payment transactions increases the chance of errors. For example, entries could be duplicated, and data can be entered incorrectly or applied wrongly to an account. After all, to err is human. This could result in customers being frustrated and losing time trying to find the problem. The seamless flow between transaction and invoice data, regardless of where the payment was taken, ensures that entries are error-free and gives confidence to customers.
- Reduces Payment Gateway Fee
Standard payment gateways can be expensive and have high fees for signing up. These fees could eat into your profits over time. These long-term fees, as well as sign-up costs, can be avoided by setting up your own payment gateway.
- Cash Flow Increases
Small businesses need to have a clear understanding of cash flow. A company cannot stay in business if it doesn’t have enough cash to pay its employees, vendors, taxes, and other operating expenses. Businesses were often faced with long wait times for invoice payments and delays in assessing their cash flow status before the arrival of electronic payment processing systems. But after its arrival, data from transactions could be integrated directly into the ERP software or general ledger. An integrated payment processing system that gives accurate and current information on how much money a business has at the end of each day allows it to manage its inventory and payroll better, pay vendors and make informed operating decisions.
- Allows Multi-currency Transactions
A payment gateway software that is owned by a third party may not allow for multi-currency transactions and recurring payments. This could limit your ability to process these transactions. But if you have your own payment gateway system, you can customize it to meet your business requirements. If you work on a global level, you can accept multi-currency transactions.
- Reduces Labor Costs
Integration of the payment gateway software results in cost savings for the business workforce in terms of its costs. Payments are automatically deposited into the general ledger at the time of payment. This eliminates the need to have an account receivable person on the payroll. An accountant can also be hired to enter data from credit card transactions and reconcile accounts. The entire process has become simpler and more efficient, which means that employees can be trained to process payments much faster, thus reducing the costs.
As the customer payment preferences have changed, allowing customers to pay in a multitude of ways has become a necessity. In order to accept credit/debit cards, mobile payments, gift cards, and even PayPal payments, one has to integrate payment processing solutions.
Have you been looking for more business opportunities? Well, PSP.Academy is the best place to find it! We have a team of experts who can help with marketing and advertising your company in order to get those new clients coming through the door. Register Now to eminently propel and drive your prospect generation and conversion rates so they’ll be sky high before long!