How The Payment Gateway Works During The Online Transactions

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Most of the persons do the online transactions during the online purchase of the products and also for the bill payments. There are two main phases of the card payment processing. One is authorization process and the second is the settlement process.

Need for the payment gateway

As the payment gateway is needed by the process of card payments. It is the service provided for the online users or to the businesses which are done online. This service helps in authorizing the payments as in the similar way that the payment has been done at the shops. But with the help of online payment, there is no need to go physically to the shop and no need of any equipment and the transactions are being carried out with the help of internet.

Working of Payment Gateway

There are various steps included in the process of Payment Gateway. As the steps start from the placing of an order to the settlement process and money transfer process. The steps included in the Payment Gateway process are described below:

Firstly, the selection of merchant store has been done by the buyer and the products has been selected for which the order has to be placed. After that the order has been placed by clicking the appropriate and the respective tab or button on the relevant or same page of the website. After this step, the encryption of the information has been done by the browser of the buyer. Then web browser sends this encrypted information to the server of the online store or merchant. After that the authentication takes place. The details of the online transactions have been sent to their payment gateway by the merchant.

Payment gateway, this service can also be provided by third party. The same things happen with third party. It means the encryption of data has also been done by third party.

After the request generated to the payment gateway of the merchant, the processor used for the payments passes the information held during the transaction to the bank’s processor which is used by the merchant for receiving the payments.

The next stage of the payment gateway depends upon the card type used by the buyer. But in all the cases of all the card types, the information is sent by the merchant to the customer’s or user’s bank. After this, the customer’s or buyer’s bank will make or process all the credential information. The processing of the information also depends upon the fund amounts in the buyer’s or customer’s account. The authorization of the money has been done by the associated banks. They can either accept the authorization or deny it. If the transaction is authorized, then the amount that has been deducted from the customer’s or buyer’s account, the customer will not be able to use this amount in the future.

The next and last step of the payment gateway is to repeat the whole process to verify the online transaction. This is only done in the case of shipping the products. This can also be done for the leaving the merchant store.

With the help of the secure payment gateway, the card payment processing can be done in a secure manner.

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