Is Payment Gateway works technically? How

 With the changing world and rapidly evolving digital infrastructure for any business to remain viable shortly, online presence has become critical. And the main component of online presence is payments. Accepting payments online is not an only luxury these days but has become necessary. The payments much are secured, free from threats of frauds and the transactions must remain secure. Payment gateways have emerged as one of the most reliable methods of online transactions in recent years. There are becoming a very important component of online businesses as they ensure smooth, safe and secure payment processing with the least latency. If you are wondering about how payment gateway works, we will provide the detailed steps below.

Payment Gateways are essentially user/ customer-facing interfaces. As in the physical stores, you are aware that Point of sale (POS) machines are used for many years for accepting payments. Similarly, for accepting the payments in Online medium, Payment gateways are used. It provides a very secure tunnel through which the card information is sent across the banks to process them.

The architecture and build of Payment gateways vary from vendor to vendor. There are some commonly laid parameters and encryption standards, but the implementation part of the different payment Gateways vary greatly. Online payment gateways use application programming interfaces (API) that is being integrated with the merchant’s website that does the main job.

How Does Payment Gateway help?

Convenience

It gives the customers much-needed flexibility. They can shop at the time of their choice and the payment gateways are available all round the clock to facilitate that.

Fast Payments

Payment Gateways ensure that the payments are quick, they can handle the large volume of transactions in a single day and have higher limits.

Security

Most of the commonly available payment gateways follow the standard practices and the encryption methods used are of again very high standard. So, you don’t have to worry about the safety, privacy and security of the payment architecture.

Steps followed on a high level by payment Gateways:

Step 1

You have decided to accept online payments, so in the first step, the Payment gateway is integrated with the merchant website.

Step 2

The customer accesses the payment gateway and at the time of checking out customer provides the payment details.

Step 3

In the third and crucial step, the information entered by the Customers on the payments page is securely transmitted to the payment Gateway, and now only the Bank can decrypt the information and can process it.

Step 4

In this step, the payment gateways verify if the customer has the available balance in the account for the transactions they are doing. This step also becomes critical as most of the fraud prevention tools are used in this step by the payment gateways.

Step 5

Once the payment gateways have verified that all the details are coherent and correct and it is not a fraud it processes the information and sends it to the bank. The issuing bank then sends these funds to the merchant bank who then deposits them into the merchant account.

Step 6

In the last step, it is notified to the merchant and the customer of the status of the transaction. And in case of any issues, a payment refund process is initiated.