What are payment gateways?
A Payment gateway refers to a technology employed by merchants to accept credit or debit card purchases. This term also includes devices featuring physical card-reading found in retail brick-and-mortar stores, besides the online stores’ payment processing portals. Payment gateways ensure secure and convenient online payments between consumers and e-commerce businesses.
Online shoppers are keen on knowing what are payment gateways? An online payment gateway is a right solution. It is a technology acting as merchant service processing for e-commerce websites the card payments. The need to understand the way it works implies understanding the different online payment players:
- The customer- is the buyer or the cardholder with a desire to purchase services or products online. They are the people initiating the transaction.
- The merchant- is the seller in the online business selling to customers a service or a product.
- The acquiring bank is the acquirer. It is the institution holding the bank account of the merchant. In the process of transaction, the acquirer transfers the transactions of the merchant to get payment to the issuing bank.
- The issuing bank is the customer’s bank. It is the same as issuing the debit or credit card used for different card schemes.
Payment gateway validates details of customer card securely. They ascertain enough funds exist in the account of the customer before ensuring the merchant receives payment. They are the interface between the acquirer and the e-commerce website of the merchant.
There are many online payment systems including, Square, PayPal, and Stripe. An online merchant should know the flow of payments online to the bank account of customers. It helps you decide online business and to ascertain efficiency.
Working of Payment Gateway
One thing of an online payment gateway is the process to ensure the money is sent in the right amount to the merchant from the customer. The payment gateway focuses on sensitive information security throughout the process. It ascertains encrypting data security provided by the user.
The following basic steps are the best payment gateway:
- A customer places an order and presses the checkout or submit button on the website.
- Once this takes place, the customer reaches the payment gateway by entering relevant information about the card or the equivalent button. Thus, the user reaches a 3D secure page of the issuing bank, asking for transaction authorization.
- On getting transaction approval from the payment gateway, the bank checks the customer has enough balance in his account to make a success of the transaction.
- The payment gateway providers send messages accordingly to the merchant. If it is a No, an error message is sent to the customer informing the card or bank account issue. If it is yes, the merchant seeks the bank from the transaction.
- The bank settles with the payment gateway, and it settles money with the merchant. On completing the process, the customer receives a message confirmation of order placing.
How information stays secure in the payment gateway?
A payment gateway ascertains your security information. The payment gateway keeps data safe:
- The entire transaction is performed through the web address HTTPS, where S represents secure. The entire transaction is done through the same tunnel.
- The system of the hash function is to use from the merchant a signed request to validate the transaction. However, the signed request is a secret word that the payment gateway and the merchant know.
- Secures the result of the payment page, while the requesting server IP is verified, stopping it from helping in any malicious activity.
- The process is secure as VPA; virtual payer authentication is implemented under the protocol of 3D secure. It adds security as an additional layer and helps to authenticate sellers and buyers easily.
Payment gateway benefits
Payment gateways allow merchants to give a better experience to the users.
- White-Label Wallet- Payment gateways allow making digital transactions using mobile wallet apps. It is the latest trend enabling users to make transactions in one place. Bring in money to the mobile wallet app from the account balance and make payments on websites or other apps.
- PCI-DSS Wallet- The PCI-DSS compliance ensures security and allows users to store personal data in the gateway or portal for recurring payments. For instance, any frequent Swiggy customer gets to save the details of the card or bank on their app or site and the gateway keeps it safe from cybersecurity threats.
- Fraud screening tools- Payment gateways reduce risk using fraud screening tools. These tools include CVV- card verification value or AVS- address verification service, and CCV-card code value. These tools ascertain no fraudulent transaction.
Payment Gateways Examples
The popular online payment gateway includes Stripe, PayPal, and Authorize. Net. Stripe is a popular eCommerce payment gateway, and it accepts payments of 100 currencies, from 25 countries, and 6 types of cards. PayPal accepts payment in 25 currencies, 203 countries, and 9 types of cards. Authorize. Net accepts payment in 11 currencies, from 5 countries, and 6 types of cards.
Payment gateways are in plenty, cross-refer the information and settle for a perfect solution. The face of the modern economy is now transferred with online shopping.
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