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How does a Payment Gateway work?

How does a Payment Gateway work?

A payment gateway is software that collects and sends payment data from a customer to an acquirer, then returns the payment acceptance or rejection to the client. A payment gateways in Credit card Processing secures the cardholder’s information, guarantees that money is accessible, and allows businesses to be paid. It connects a trader’s webpage to their payment gateway. It secures essential cardholder data and guarantees securely sent from the customer to the acquirer through the retailer.

The Payment Gateways Provider acts as a go-between for your customer and the Credit card Processing merchant, ensuring that the transaction is complete safely and quickly. An online payment gateway may make integrating the required software easier for businesses. The Payment Gateway Provider handles the customer’s sensitive card information between the acquirer and credit card processing gateways as a mediator during payment processing.

Purpose of a payment gateway

Why do you need a payment gateway if it’s only a middleman, you may ask? A merchant solution should note that online transactions are monitored by card-not-present transactions. The client’s credit card cannot be on a P.O.S. terminal physically,  as it would be if the price were total in an actual store. As a result, credit card processing gateways may only depend on the card details provided by the client on the payment page. The fraud risk is much greater with card-not-present transactions, and this is where credit card processing gateways come in handy 

Fraudsters would have easy access to the credit card processing Payment Gateway Provider Merchant Solutions handle, putting your company at risk of fraud and chargebacks. Furthermore, criminals would discover new methods to start unauthorized transactions, making you even more vulnerable to fraud and harming your brand’s image.

Process of Payment Gateway in Merchant Solutions

Let’s take it a step further and look at how payment gateways work throughout the payment process now that you know why businesses need one. Merchant Solutions payment gateway performs the following functions throughout the online payment process using a credit or debit card:

1.   Collection

When a client goes to a playless merchant solution checkout to input their credit card information. The payment page will either be supplied by your payment gateway or securely transmit the information to it.

2.  Transfer 

The payment gateways securely sends your payment processor your customer’s credit card information and transaction data (A.K.A. acquirer, acquiring bank, or merchant solution).

3.  Authorisation

The transactions approved after this data has moved via the card network and to your client’s bank, that consumer will be informed if the payment was completed or not.

Payment Gateway Provider process

1. The client selects the product or service they want and continues to the payment page. Most payment gateways provide you with a variety of payment page choices. The merchant solution payment gateway provides you with the following options for your payment page:

· A payment page that is host

A hosted payment page is a ready-to-use payment page that redirects clients to when they’re ready to check out. Before sending the transaction data to the acquirer, the payment gateway encrypts it. If you don’t collect and keep cardholder data on your server, a hosted payment page lowers the PCI load for online businesses.

· Server-to-server connectivity

It allows communication between the merchant’s server and the payment gateway’s server; a server-to-server integration is a direct integration. A straightforward transaction may be started by asking for the card information on the payment page. Customers may complete a card payment without being routed to the Payment gateway’s services payment page, allowing merchants to have greater control over the look and feel of the payment page.

· Encryption on the client-side

The merchant’s PCI compliance obligations were simplified. It allows you to take payment gateways services, on payless merchant solutions while encrypting card data using the payment gateway’s encryption library in your browser.

2. On the payment screen, the client enters their credit or debit card information. The name of the cardholder, the card expiry date, and the CVV number are among these data (Card Verification Value). Based on your integration, this information is sent onto your Payment Gateways (hosted payment page, server-to-server integration, or client-side encryption).

3. Before sending the card data to the acquiring bank, the payment gateway tokenizes or encrypts the card information and conducts fraud checks in credit card processing gateways.

Credit card processing gateways operations

The fundamental operation of a payment gateways may be summarized as follows:

  • When a client makes an order on the website, they click the “Submit Order” or “Checkout” button to start the process.
  • The merchant provides the payment gateway with the information of the customer’s transaction in a secure manner. The payment gateway sends the transaction to the issuing bank for approval.
  • The issuing bank approves or rejects the transaction once it has been verified (depending on the money available in the customer’s account). The merchant solution receives this notification from the payment gateway.
  • The Payment gateway services, settles the transaction amount with the bank and pays the money with the merchant.