How does a global payment gateway work?

Gaining access to consumers all over the world is becoming increasingly easier due to the rise in people’s online usage. But, although reaching them and getting your brand in front of their eyes is now possible, you still need to have the right fundamentals in place to ensure the payment process is smooth. Without it, you may see a decrease in authorisation rates which won’t do your reputation, your customer’s experience or your bottom line any good.

So, if you’re looking to expand your business and explore the international market, that’s where a global payment gateway and local acquirers come into play.

In this blog, we’ll delve into the basics of the payment gateway for global processing and how they can benefit your business to future-proof your expansion goals.

What’s in this article?

• What is a global payment gateway?
• How does it work?
• Benefits of a global payment gateway
• Best global payment gateway providers
• Choosing the right global payment gateway

What is a global payment gateway?

Just like a generic payment gateway, a global payment gateway is the bridge between your online store and the bank that processes your customers' payments. It securely authorises credit card transactions and ensures that funds are transferred from your customer's account to yours.

However, using a payment gateway that is globally connected to a large network of acquirers and provides the functionality for you to accept a range of currencies and payment methods will help you to break through any international barriers[I(1]  and accept cross-border payments. On top of that, they can also provide an interface that allows the use of multiple languages to improve your customer’s experience.

How does it work?

Here’s a quick step-by-step on how the payment process works.

1. Customer makes a purchase: This step needs little explanation; the customer simply enters their payment details on the checkout page.
2. Encryption and transmission: The payment details are encrypted to protect sensitive information. Then, they're transmitted securely to your payment gateway.
3. Authorisation: The payment gateway sends the encrypted information to the acquiring bank (the bank that processes your transactions) or payment processor. The bank then verifies the transaction details with the customer's bank. Utilising local acquiring banks within the same region as the issuing bank makes this process much more seamless with less fees, lowering the chance of a declined transaction.
4. Approval or decline: The customer's bank either approves or declines the transaction based on available funds, fraud checks and other factors.
5. Transaction response: The response (approval or decline) is sent back through the payment gateway to your website and displayed to the customer.
6. Funds transfer: If the transaction is approved, the funds are transferred from the customer's bank to your merchant account.

Benefits of a global payment gateway

If you’re considering whether to improve your processing and upgrade your payment gateway to accept international payments, then let’s take you through the benefits to show it is, more often than not, the right choice.

Reach global markets

With a global payment gateway, businesses can reach customers worldwide, regardless of their geographic location. This opens up a whole host of opportunities to tap into new markets and diversify your customer base that may not have been accessible otherwise. By eliminating barriers related to payment processing overseas, businesses can attract customers from anywhere in the world.

Increased revenue

Accessing global markets means accessing more potential customers. The ability to accept payments in multiple currencies and from various regions enables businesses to capitalise on international sales opportunities. This can result in increased revenue streams and overall business growth.

Competitive advantage

In today's interconnected world, businesses need to compete not just locally, but globally. Having a global payment gateway gives businesses a competitive edge by enabling them to offer seamless payment experiences to customers worldwide. This can set them apart from competitors who may not have the same level of international payment capabilities.

Scalability

Global payment gateways are designed to handle high volumes of transactions, making them scalable solutions for businesses looking to grow internationally. Whether a business is processing a handful of international orders or thousands per day, a global payment gateway can accommodate the scalability needs of businesses as they expand into new markets.

Secure transactions

Global payment gateways often come hand-in-hand with advanced security features to protect your customers' payment information, reducing the risk of fraud. For example, here at Total Processing, our gateway comes with a fraud suite consisting of 120 fraud tools, including chargeback alerts, 3DS2 authentication, AVS checks and smart detection tools.

Convenient management

Most global payment gateways also come with user-friendly dashboards that allow you to track transactions, manage disputes and generate reports easily. Our Total Control dashboard does just that and more, allowing you to analyse real-time insights and create custom reporting to spot behavioural trends to help you make smarter business decisions.

Choosing the right global payment gateway

Now that you understand how they work, you might wonder which one is the best global payment gateway provider for your business. Here are a few factors to consider:

• Compatibility: Ensure the payment gateway integrates seamlessly with your website platform and shopping cart.
• Supported currencies: Look for a gateway that supports the currencies you want to accept.
• Security: Opt for a gateway with robust security features like encryption, PCI compliance, and fraud prevention tools.
• Cost: Consider the fees associated with the gateway, including setup fees, transaction fees and monthly subscriptions.

For a full list, check out our blog on things to consider when choosing a payment gateway.

A global payment gateway is essential for businesses looking to expand internationally and accept payments from customers around the world. By understanding how it works and choosing the right provider, you can streamline your payment process, increase sales and provide a better experience for your customers.

If you’re ready to scale your business and open up to new markets, now might be the perfect time to take a look at the payment gateway you use. To learn more about how we can help you expand, get in touch with one of our specialists.