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e-Commerce Payment Gateways

Expert: Kathy Brown

Melinda asked:

What is the role of payment gateways in e-commerce, and do you think that using one will make a virtual store more competitive and cost effective?

Kathy Brown answered:

Payment gateways are credit card processing services that allow you to authorize and process credit card orders online in real time. Payment gateways act as a bridge between the merchant's website and the financial institutions that process the transaction. Payment gateways are an integral part of e-commerce.

Existing brick and mortar companies may find that they can target a new market by selling online. Whether or not a business becomes more competitive by providing online sales will depend on the marketing mix, product, place, promotion and price. The marketing mix will help to determine whether your particular business will be competitive.

You will need to do some homework for cost effectiveness. There are many, many companies that offer payment gateway services but not all will be suitable for your business. Some providers may only be available in particular countries, others may offer low fees with fewer services and yet others may have high fees but do multiple services. Do your homework…you'll be glad you did.

About the author

Kathy Brown is a consultant at Web Eyes Consulting, a firm specializing in the development of e-commerce solutions for businesses both large and small. Web Eyes Consulting may be visited online at

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