Payment processors vs payment gateway

Understanding how online transactions happen is important for anyone entering the world of e-commerce. Two terms that you should definitely be aware of are payment processors and payment gateways. While both assist in online transactions, there are a few differences between their roles and functionalities.

Payment processors are responsible for the back-end processing, while payment gateways work as a bridge between the seller's website and the processor. Keep reading to learn more about what payment processors and payment gateways are and some of their major differences.

What is a payment processor?

A payment processor is a third-party system that assists in transactions between a seller and a customer by securely handling payment information. It acts as the intermediary that allows businesses to accept payments from customers through multiple modes. These modes include debit cards, credit cards, digital wallets, and more. These processors, such as ours, ensure that all the transactions are fast, smooth, and secure.

What is a payment gateway?

A payment gateway allows an online transaction to take place through multiple payment modes. Companies use it to receive digital or online payments via their website or app. To put it simply, a payment gateway, such as Plural, connects a bank account to the platform where the money needs to be transferred. Plural is not only a user-friendly payment gateway but also encrypts sensitive information. This ensures a secure transmission of payment data between the customer, seller, and bank.

What are the differences between payment processors and payment gateways?

The processors and gateways are different but work together efficiently. As a group, they enable safe and secure data transfer between the parties involved. However, here are some of the key differences between them:

Things to consider while choosing the right payment gateway for your business

There are a few things that you should consider while choosing the right payment gateway. Even though the steps vary with the business's needs, here is a step-by-step process:

1. Planning

The first step is to understand your business. Identify your target audience, understand the number of transactions you get, and choose which payment methods and currencies you want to support.

2. Success rates

A PG with high authorisation rates is crucial to minimise cart abandonment. At Pine Labs, our payment gateway provides with a proven track record of smooth transactions with authority rate of 95% for UPI transactions.

3. Payment methods

We offer a diverse range of payment options to cater to different customer preferences. This includes credit/debit cards, digital wallets, net banking, UPIs and buy now pay later (BNPL), paybypoints, & links, etc.

4. Affordability suite

Evaluate pricing models, setup fees, and transaction charges. At Pine Labs, we offer payment gateways that caters and aligns for various business types and budgets and offers transparent pricing.

5. RBI compliance

At Pine Labs, we adhere to Reserve Bank of India (RBI) regulations to safeguard customer data and prevent fraudulent activities. The Compliance of PCI-S3F, PCI-DSS, PCI-PIN, UKPT/TLE (terminal line encryption), certifications done every 1-yr/ 3-yr as per RBI PCI Council guidelines.

6. Security and encryption

Robust security features are paramount. Our payment gateway Plural support end-to-end encryption, dynamic, unique session keys are used to encrypt PIN and card information via HSM and updates geolocation for each transaction carried in our PoS systems.

Experience a smooth transaction with Pine Labs

To sum it up, payment gateways act as the secure gatekeepers who protect your customer's information. On the other hand, payment processors ensure that the money travels smoothly from the customer's bank to your account. Utilising both of them together leads to a seamless transaction process for you and your customers.

Plus, after reading the step-by-step process to create a payment gateway, you might believe that it's easy. Well, even though it is beneficial, it is not straightforward. As a result, many people look for trusted solutions that have already made many lives simpler. One such solution that we offer is Plural payment gateway by Pine Labs. Our payment gateway includes the, affordability suite, payment links, subscription solutions, and more.