HOW DO PAYMENT GATEWAYS WORK TECHNICALLY?
- e-Commerce Transaction
- Online Payment Process
- Payment Gateway Process – A payment gateway is a merchant service provided by an e-commerce application service provider that authorizes credit card or direct payments processing for e-businesses, online retailers, bricks and clicks, or traditional brick and mortar. The payment gateway may be provided by a bank to its customers but can be provided by a specialized financial service provider as a separate service such as a payment service provider. A payment gateway facilitates a payment transaction by the transfer of information between a payment portal and the front end processor or acquiring bank.
- e-Commerce Transaction
- Online Payment Process
- Payment Gateway Process – A payment gateway is a merchant service provided by an e-commerce application service provider that authorizes credit card or direct payments processing for e-businesses, online retailers, bricks and clicks, or traditional brick and mortar. The payment gateway may be provided by a bank to its customers but can be provided by a specialized financial service provider as a separate service such as a payment service provider. A payment gateway facilitates a payment transaction by the transfer of information between a payment portal and the front end processor or acquiring bank.
A Payment Gateway is a middle-man that securely takes money from your customers and sends it to your bank account. Payment Gateway is a processor that helps in authenticating and authorizing transactions between your customer and your bank.
The payment gateway process starts with a customer placing an order from a payment gateway-enabled seller/merchant.
- e-Commerce/Online Shopping
When a customer orders a product from a payment gateway-enabled merchant, the payment gateway performs a variety of tasks to process the transaction:
- Buyer selects the product, clicks on BUY Button initiating the payment from the merchant’s website where user info is collected
- This info is sent to the payment gateway / payment aggregator
- Payment aggregator collects card info in a secure server and passes this through its Acquiring Bank (Payment aggregator’s bank) to the Card networks like VISA, MasterCard
- The Card Network checks with the Issuing bank (Customer Bank) whether the transaction can be authenticated or not.
- POS Transaction
- Debit/Credit Card Transaction – If everything is correct here, consumer a/c or card is debited by the Issuing bank:
- Issuer bank sends confirmation to the card network
- This is further notified to the acquiring bank and then to the payment aggregator
- Payment aggregator now send a confirmation to the Merchant, who further informs the consumer
- The consumer also gets notified by his bank (issuing bank) about the transaction
PPT Slide @Slideshare.net
