What is the difference between a payment gateway and a payment service provider (PSP)?

A payment gateway is a secure payment technology that acts like an online POS terminal. It encrypts and transmits customer payment data from your ecommerce website to the payment processor for authorization. You typically need a separate merchant account. A payment service provider (PSP) is a broader, often all-in-one payment processing solution. It includes gateway functionality but also handles payment processing. It usually provides the merchant account (or equivalent), supports multiple payment methods, and offers fraud prevention tools, simplifying the entire process under a single provider.

How long does it take for ecommerce payments to process?

Some payment service providers (PSPs) may offer faster settlement options, sometimes with next-day or even faster processing for specific platforms or fees, but the standard timeframe remains one to three business days. Bank transfers, such as ACH, can sometimes take slightly longer to settle than credit card payments.

Can ecommerce stores accept recurring or subscription payments?

Yes, absolutely. Stores can accept recurring ecommerce transactions or subscription payments. Common use cases include: Software as a Service (SaaS) Streaming services (video, music) Subscription boxes (e.g., beauty products, coffee, snacks) Membership sites (online courses, premium content) Recurring donations for non-profits Service retainers While it's a standard capability, setting it up requires choosing a payment provider with the necessary features and correctly configuring the billing logic.

What happens if a customer disputes a charge (chargeback)?

When a customer disputes a transaction, their bank (the issuer) initiates a chargeback. This process immediately withdraws the disputed amount from the merchant's bank account and notifies them of the claim. The merchant can then contest the chargeback by submitting compelling evidence, such as proof of delivery, service completion documentation, or customer communications. The issuing bank thoroughly reviews this evidence before rendering a final decision. If the decision favors the customer, the funds remain permanently withdrawn from the merchant, who typically incurs an additional chargeback fee. Merchants who successfully challenge chargebacks must provide comprehensive documentation establishing the transaction's legitimacy.

The Evolution of Digital Ecommerce Payments

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by Nicolette V. Beard

06/09/2025

Nicolette V. Beard

Nicolette is a Content Writer at BigCommerce where she writes engaging, informative content that empowers online retailers to reach their full potential as marketers. With a background in book editing, she seamlessly transitioned into the digital space, crafting compelling pieces for B2B SaaS-based businesses and ecommerce websites.

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