I’m confused about payment tech terms while setting up my store. What’s the real difference between digital wallets and payment gateways? Can I use wallets like Paytm or PhonePe instead of a full gateway for collecting payments from customers?
Answer by: abdullah-al-naim
3 weeks ago
What are payment gateways?
Payment gateways is a term used for the E-commerce service which provides a channel to authorize the credit/debit card payments from the customer’s bank to the online retailers. In other words, payment gateways facilitate the transfer of funds from the customer to the website through a secured portal.
There are two types of payment gateways, i.e. direct and external gateways. In the external payment gateways, the customer is directed to another online portal to process the transaction and can be redirected to the parent website once the transaction is confirmed.
However, in the direct payment gateways, the payment process is done on the parent site itself.
Some of the popular payment gateways are PayPal, SecurePay, Fastcharge, and Paynova.
What are digital wallets?
Digital wallets, on the other hand, allow customers to store their money in an online wallet, which they can then use for various online transactions directly from the wallet. Digital wallets help you save time and are more secure since you do not have to enter your card details every time you do a financial transaction online.
There are many smartphone apps which offer digital wallets like Paytm, MobiKwik, and FreeCharge. With digital wallets, you can pay utility bills, recharge mobile phones, and DTH connections as well.
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