• what is Payment Gateway
• How does a Payment Gateway work
• What is required for a Payment gateway
• What are the benefits
Payment Gateway:
What is a payment gateway
Online payments are made thousands of times a second all over the world. There are hundred of different ways these payments are made, including PayPal and EFT transactions but a large proportional are based on payment gateway technology. A payment gateway allows a connection directly between a website and a bank meaning that payments can be placed directly on a website and deposited into a bank account.
A payment gateway is a server that is dedicated to linking websites and banks so that online credit card transactions can be completed in real-time.
How does a payment gateway work
Payment Gateways work by providing the secure, integral link between a website and the bank. When credit card details are submitted on a website the payment gateway receives these details and sends them to the bank for verification. The bank then replies with a response usually either accepted or declined. The payment gateway then sends this response bank to the web server when the appropriate message is displayed to the user.
For Example- "Your payment has been Successfully ".
What is required for a payment gateway
If you are looking at accepting real-time credit cards on your website, then a payment gateway is required. There are three main requirements for a payment gateway to work:
(1) A website that meets the security and eligibility requirements for the bank to issue a merchant account.
(2) A merchant account from a bank. A merchant account is a special kind of bank account that can be linked directly to a payment gateway. These bank accounts are issued only upon review of websites to ensure it meets privacy and security requirements. Requirements often include an SSL certificate and privacy policy.
(3) A payment gateway provider. Payment gateway provider offer the server that acts as the link between your website and rhe bank. The server has a very special configuration and very high level of security due to the sensitive nature of the data being transferred.
Once all three requirements are met, the payment gateway then needs to be connected to the website and to the merchant account. This will then allow for a real-time credit card processing.
What are the benefits
By incorporating a payment gateway into your e-commerce website you can ensure you are providing the easiest and most streamlined buying experience for your customers. The easier it is to buy from your online store the more likely visitors are to purchase.
A payment gateway is beneficial for a few reasons.:
• Visitors stay on site:
Many websites will take advantage of third party or hosted payment processing facilities such as PayPal. These facilities do work well and can provide secure payment options, however they do have drawbacks. A major advantage of using a payment gateway is that customers will not leave your website to make payment. All users information and credit card details are inputted on your website meaning fewer steps for the buyer. Further to this re-directing users to a separate website for payment often leads to mistrust and payment abandonments.
• Real time transactions and payments:
Utilizing a payment gateway allows you to accept credit cards directly on your website, but also means that these credit card transactions are processed in real-time. Real-time transactions mean that you as the merchant get paid immediately and that the customers get instant feedback as to whether their payment has been accepted or declined.
• Saves time and reduces administration:
A payment gateway saves time with the fact that credit cards are processed in real-time and founds are deposited directly into a merchant account. A payment gateway removes the need for manual card processing of third party account consolidation.
Typical Transition Processes :
When a customer orders a product from a payment gateway enabled merchant the payment gateway performs a variety of tasks to process the transaction.
(1) A customer placed order on website by pressing the submit order or equivalent button, or perhaps enters their card details using an automatic phone answering service.
(2) If the order is via a website the customer website browser encrypts the information to be sent between the browser and the merchant webserver. In between other methods this may dine via SSL ( Secure Socket Layer) encryption. The payment gateway may allow transactions data to be sent directly from the customers browsersto the gateway, bypassing the merchant systems.
(3) The merchant then forwards transaction details to their payment gateway. This is another (SSL) encrypted connection to the payment server hosting by the payment gateway.
(4) The Payment Gateway Forwards the transaction information to the payment processor used by the merchant acquiring bank.
(5) The payment processor forwarded the transaction information to the card association (e.g., Visa /MasterCard / American Express). If an American Express or discover card was used, then the card association also acts as the isuing bank and directly provide a,response of approved or declined to the payment gateway. Otherwise [e.g., a MasterCard or visa card was used] the card association routes the transaction to the correct card issuing bank.
(6) The credit card issuing bank receives the authorization request and credit or debit checks and then sends a response back to the processor (via the same process as the request for authorization) with a respons coad approved denied. In addition to communicating the fate of the authorization request the response code is used to defined the reasons why the transaction failed.
(7) The credit card issuer makes a settlement payment to the acquisition bank.
(8) The entire process from authorization to settlement to funding typically takes 3 days.
0 Comments