A gateway setup fee is a fee merchants pay when their account is set up to accept credit cards online.
When you first open a merchant account, your merchant account provider will help you determine the best payment solution. If you want to take credit cards over the internet, you’ll need a payment gateway.
A gateway is the software that lets you accept payments online. Some services, including PayPal and Stripe, act as both a gateway and a merchant account provider. These models are known as payment aggregators. In most cases, merchants will have both an independent gateway and a merchant account that plugs into it.
Either the gateway provider or the merchant account provider may charge a gateway setup fee.
In some situations, there isn’t a gateway setup fee at all. For a small, low-risk eCommerce business working with their local bank, there might not be a fee. A higher-risk business model or one with multiple merchant accounts is often more likely to be charged a gateway setup fee.
Some merchant account providers charge a gateway fee every month. The gateway setup fee, though, is only charged when you first set up your account. It’s most commonly a one-time, flat fee.
The amount merchant account providers charge for setting up a gateway varies. Some companies list pricing on their websites.
In general, you’ll need to talk to a sales representative for details. They can advise on whether you’ll be charged this fee and, if so, what the specific amount will be.
If you’ve ever shopped online, you’ve probably interacted with a payment gateway without even realizing it. When you enter your credit card details, the merchant’s website securely forwards them to a gateway.
Then, the gateway sends the payment information to the merchant’s payment processor.
The payment processor reaches out to the card’s issuer to request an authorization. When a response is received, the processor forwards it to the gateway, which forwards it to the website. This whole process takes a few seconds.
Without payment gateways, secure online shopping wouldn’t be possible. And with 36% of U.S. shoppers buying goods online in 2020, those sales are crucial to businesses.
So, where do gateway setup fees come in? For merchants, there’s a good chance that you’ll pay one to be set up with a payment gateway when you open your account.
The fee covers the resources involved in connecting the gateway to your website. Your payment processor will also work with you to ensure that your setup is secure and PCI compliant.
Payment gateways use encryption methods such as SSL (Secure Socket Layer) to keep customers’ data safe.
If you’re new to taking cards online and don’t have your own site yet, your processor can help you get started. One option is to set up a payment page that your processor hosts. Or, if you use a specific software such as a restaurant management system, it can integrate with your payment gateway. The gateway setup fee covers these different scenarios.« Back to Glossary Index
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