What is a gateway for online payment?

What is a gateway for online payment?


As online shopping grows, secure and efficient payment gateways have become more necessary. A payment gateway authorizes and processes online transactions between buyers and sellers.

The payment gateway bridges the buyer's bank and the seller's payment processor. It also ensures that the transaction is secure and the payment gets processed quickly and accurately. In this blog post, we will explore what payment gateways are and how they work.

Consumers and businesses can make payments online using this service. According to Statista, the Covid-19 pandemic has taken the world of eCommerce by storm, with online sales expected to reach $5.7 billion by 2022. At the same time, payment-related fraud has increased, accounting for $41 billion in losses by 2022.

These figures demonstrate the importance of a payment gateway in addressing the complexities of online payment processing. It is also necessary to ensure a seamless and secure checkout experience.

You don't need to be a payment gateway expert if you're an online merchant. But it's worth understanding how an online transaction flows from your customer to your bank account. Join us as we unpack what a payment gateway is, how it works, its security features, and how to choose the best payment gateway service for your company.

What Exactly Is a Payment Gateway?

A payment gateway is a technology merchants use to accept customer debit or credit card payments. Card-reading machines used in physical retail outlets and online payment gateways are referred to by this name. However, in recent years, brick-and-mortar payment gateways have begun to accept phone-based payments via QR codes or Near Field Communication (NFC) technology, payment gateway in Bangladesh also more updated now. This system provides services like-

●     Payment gateways are the consumer-facing interfaces that collect payment information.

●     This service available in physical stores is point-of-sale (POS) terminals. It accepts credit card information by card or smartphone.

●     Payment gateways are the "checkout" portals used in online stores to enter credit card information or credentials for services like PayPal.

●     Payment gateways are distinct from payment processors. It uses customer information to collect payments on the merchant's behalf.

●     This service is also available to facilitate payments in cryptocurrencies such as Bitcoin.

How Does A Payment Gateway Function?

Now that you understand why a payment gateway is essential for merchants, let's look at how it works throughout the payment process-

●     When customers choose the services they want to buy, they go to the payment page of an eCommerce website. Most payment gateways provide various options for a checkout page.

●     The customer enters their credit or debit card information on the payment page. This information includes the cardholder's name, card number, card expiration date, and card verification value (CVV) number. Depending on the merchant's preferred integration, this information is securely transmitted to the payment gateway (hosted payment page, server-to-server integration, or client-side encryption).

●     Before sending the card data to the acquirer, the payment gateway encrypts the card details and performs fraud checks.

●     The acquirer securely transmits the information to the card schemes. It performs additional fraud checks before sending the payment data to the issuer for payment authorization.

●     The transaction is authorized once the issuer has completed the necessary fraud screening. This process includes validating the transaction information and ensuring the cardholder has sufficient funds for the purchase and that the bank account is valid. The acquirer receives the issuer's approved or declined payment message from the card schemes.

●     The acquirer returns the approval or decline message to the payment gateway. Then it forwards to the merchant. Depending on the news, the merchant may display a payment confirmation page or request that the customer provide another payment method.

●     Card capture requests - once the authorization has been completed, the merchant can "capture" the amount for the purchase from the buyer and deposit it into the merchant account. The customer will be billed once the capture has occurred.

●     Settlement – if the payment is approved, the acquirer collects the payment amount from the issuing bank and puts the funds' on hold' into the merchant account (more on the merchant account below). The settlement depends on the merchant's agreement with their payment service provider.

Both merchants and customers gets advantages from a payment gateway. However, most of its activity happens behind the scenes of the payment process. All the abovementioned steps can occur near real-time or take a few seconds.

What Is The Purpose Of A Payment Gateway?

You'll need a payment gateway to accept payments through your e-commerce store. While different payment gateways provide additional services, they should all provide you with the assurance that your customers' payments are being processed safely and securely.

A payment gateway can also allow you to be paid using methods other than credit cards. PayFast, for example, accepts Mastercard and Visa credit and debit card payments, as well as Masterpass, SnapScan, Zapper, Instant EFT, SCode, and Mobicred. A good payment gateway should also offer consistent fraud protection by being PCI compliant and services for credit card chargebacks, reconciliation, and overall account management.

How Do You Configure A Payment Gateway?

You can integrate a payment gateway into a website in various ways. Some are complex and require the involvement of developers. In contrast, others work with pre-built shopping carts that usually only need an ID and other essential information.

In conclusion, payment gateways ensure that online transactions are secure, efficient, and accurate. They act as a bridge between the buyer's bank and the seller's payment processor, allowing for fast and reliable processing of payments. When choosing a payment gateway, it is essential to consider security, ease of use, and transaction fees. By understanding how payment gateways work, you can make informed decisions and ensure that your online transactions are safe and reliable. Payment gateway in Bangladesh like SSLCOMMERZ is make this procedure more easier.

 

This article is originally published on Signalcv.

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