Avoiding credit card gateway processing fees

When it comes to payment processing, the difference between using an integrated solution and a credit card payment gateway can make a big impact on your bottom line. Here, we’ll take a look at some of the ways that an integrated solution can be more cost-effective than a payment gateway. Let’s begin by defining the terms.

What is a credit card payment gateway?

A credit card payment gateway is a third party hosted payment software solution that allows a business to accept credit and debit card payments. It's simply a connection between two points in payment processing. Payment gateways are typically used when a direct connection to the processor is not possible. They are often used in eCommerce websites in order to connect to a processor, but this article will focus on their use for card present purchases.

What is an integrated payment solution?

An integrated payment solution is built directly into the merchant’s point of sale system to facilitate the acceptance of card payments. It connects directly to the merchant’s payment processor and typically offers more customizable features than a gateway solution.

Equipment and fees

Unlike an integrated solution, a merchant using a payment gateway will likely have to pay fees to both their payment processor and their gateway provider. Merchants may also need to purchase additional software or hardware to facilitate compatibility between their POS and their processor.

Daily operations

With a gateway solution, sales must be entered twice— at the point of sale and at the payment's terminal. This creates two separate sales slips and two daily sales totals which require reconciliation. An integrated solution eliminates this duplicate accounting effort, saving time. And for busy merchants, time is money.

Transaction data

Services like transaction reporting typically come standard with an integrated solution. But with a gateway, they may only be available for an additional fee.

Improve customer service

A gateway solution that requires entering the purchase twice can cause delays at checkout that can leave customer frustrated. Conversely, an integrated payment solution can help improve customer service by saving time spent on completing transactions. The savings here comes from the fact that happier customers are more loyal customers— who are more likely to spend more money at your business.

Access timely support

With an integrated payments solution, merchants have a single point of contact for POS support issues—something a payment gateway can’t offer. And, like transaction reporting, a gateway’s support services may only be available for a fee. If a merchant has to pay for support, they may do everything they can to avoid it. But when it’s readily available and comes standard with the offering, that’s something more valuable than money can buy.