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Understanding Online Payments

Watch this short video and learn the basics of how online payment processing works. You'll also find out what to look for when selecting the best payment processing system.

To accept payments online, you need

  • An Internet Merchant Account (IMA)
  • A payment gateway

There are two methods for acquiring an IMA and a gateway. They are:

  • All-in-One Payment Solutions - IMA and gateway are bundled together
  • Payment Gateways - Mix and match payment gateways and banks

To attract customers who prefer not to use credit cards online, it's easy to order alternate payment methods, such as PayPal. Typically all that's required for this is an account with the service provider.

All-in-One Payment Solutions

With an all-in-one payment solution, your IMA and gateway are acquired from a single vendor. This option is beneficial if you want to:

  • Manage just one vendor for all online payments
  • Get all of your support from a single source
  • Use easy-to-access reporting for all payment methods
  • Integrate only one application on your website gateway

PayPal offers a wide range of payment solutions to suit various requirements, Link to the Payment Solutions page

Payment Gateways

Payment gateways let you connect your website to your merchant account. Consider this if you already have a physical store presence with IMA capabilities from your existing bank. A payment gateway allows you to:

  • Keep your existing IMA as you expand online
  • Connect a compatible gateway with your existing IMA
  • Retain the same gateway if you change IMA providers

These solutions are for merchants who already have an Internet merchant account and only need a gateway. Merchants may choose between PayPal's Payflow Link and Payflow Pro gateway solutions (available in US, Canada, Australia & New Zealand only).

  • Gateway Advantages

    • Gateways can provide many benefits, with the main benefit being security. We recommend to all our customers that they use a payment gateway to handle all credit card payments. While VPCART provides credit card number encryption and can ensure that the software is secure, it is still stored in a location that a hacker may be able to access. Whereas, when using a payment gateway, the credit card information is sent directly to the bank for verification and therefore no credit card details are stored.

      In addition to security, payment gateways also provide the following benefits:


      • Credit card validation and processing in real-time
      • Less fraud (but many stolen credit card numbers are floating around)
      • Money is normally deposited into your bank account automatically
      • Reports and refunds normally allowed via browser by gateway company (not VPCART)
  • Gateway Disadvantages

    • Every gateway company charges fees. Fees can include some or all of the following:


      • Fixed fee per month
      • Percentage fee per amount spent
      • A fixed fee per transaction
      • Also, your bank or the gateway's bank will charge a merchant fee for the privilege of allowing credit card purchases. This can range from 1-5% or more.
  • VP - CART Gateways

    • VP-CART DOES NOT REQUIRE that you use a payment gateway. You can process payments with or without credit cards using VP-CART. You can process them as you would any phone or mail order but all the details are stored in the VP-CART database. However, as mentioned previously, processing credit card transactions via a gateway is still the preferred method.


      VP-CART simply provides the interface to the gateway company. This eliminates the need for you to do your own programming.

      It is still your responsibility to sign up with the gateway company, pay whatever fees they charge (each has different fee structures), follow their administrative rules and policies.

  • Types of Gateways

    • Currently, there are three main types of gateway interfaces:


      • COM-based gateway interface
      • Form-based gateway interface
      • XML transport gateway interface


      A COM-based gateway requires that you install software called a DLL provided by the gateway company on your web hosting server. However, many web hosting companies, such as GoDaddy, do not allow such installs. These gateways also require that you have your own dedicated SSL certificate (shared SSL is not adequate for these types of services).

      XML transport gateways work similarly to COM-based gateways but do NOT require a DLL install. They use a facility already installed on most Windows servers. A dedicated SSL is also required for an XML-based gateway.

      Form-based gateways, and possibly the most common type, do not require any extra software to be installed on your web hosting server. Some, but not all, require that you have your SSL certificate.

      The advantage of COM/XML-based gateways over form-based is that it integrates with your store, and the customer will not be directed to an external server for credit card processing. However, the disadvantage of this is that credit card details will need to be sent over the Internet from your server to the payment gateway for processing and thus making it less secure.

  • New Gateway Support

      We can develop new gateway interfaces on request. There is a fee associated with this development to cover the cost of designing, programming, and testing the new gateway interface. We can quote a cost for developing a new gateway; please send your requests to our helpdesk.


Alternate Payment Methods

Because of credit card fraud and identity theft concerns, some customers are uncomfortable providing their credit card information on new websites or any that are unfamiliar to them. You can serve those customers by accepting alternate payment methods like PayPal. With this option, many businesses—especially new or small businesses—find they can:

  • Increase sales on their site. Customers can select an alternate payments provider that they already trust
  • Reduce shopping cart abandonment
  • Add flexibility for their customers. Customers can pay without sharing personal and credit card information with businesses

PayPal offers a wide range of payment solutions to suit various requirements, Link to the Payment Solutions page

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