How Does a Payment Gateway Work?
A payment Gateway permits E-commerce merchants to accept credit cards on their websites. A Sensitive payment information is encrypted by the gateway to ensure that it passes securely between the customer and the merchant. These are Online secure payment methods.
The gateway can also be considered as a virtual point of sale system allowing communication between online shopping carts and the banks processing the transaction.
The process starts when a customer places an order on a website by pressing the "Submit Order" button in an online shopping cart. The payment gateway then forwards the transaction information to the payment processor used by the merchant's acquiring bank. From there the payment processor forwards that information to the appropriate card association.
The credit card issuing bank receives the request or the Authorization and does the necessary credit or debit check. After this, sends a response back to the processor in the form of an approval code. As a next procedure, the processor forwards the authorization response back to the payment gateway.
After receiving the response, the gateway forwards it on to the website, which then evaluates it as a relevant response and relays the outcome to the merchant and card holder.
Finally, the merchant then fulfils the customers order, then after a batch the acquiring bank receives the funds, and deposits them into the merchants bank account.
Safe Online Payment methods such as Payment gateways can be a stand-alone system designed for integration with other 3rd party systems.
Most of the payment gateways such as Top Payment Gateways in South Africa have their own merchant banking services and benefits or have partnered with merchant banking services. Usually you are charged a nominal fee on the number of transactions.
Few things you must keep in mind in case of Payment Gateway such as
Check for basic security features.
Ensure that they are in compliance to the Payment Card Industry Data Security Standard.
Can whether it can provide you with complete service package.
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