E-COM GATEWAY
What is a Payment Gateway?
Payment gateways, also known as payment services, payment solutions providers, or payment processors, essentially act as a bridge between ecommerce websites and payment processors by transferring sensitive information such as credit card details.
The ecommerce industry has witnessed an increasing trend in the use of payment gateways. These are services provided by various ecommerce entrepreneurs to enable the integration of payment solutions into ecommerce businesses
Payment gateways have become a vital component of online businesses, providing merchants with a secure and convenient method to process payments from any location globally
Why Payment Gateways Are Important for E-commerce?
Payment gateways are an essential component of ecommerce because they facilitate the secure processing of multiple online payment methods. Payment gateways allow businesses to securely authorize and process credit card transactions online.
They help ensure that funds are transferred securely from the customer’s account to the business’s account, protecting both parties against fraud and other financial risks.
Without a payment gateway, businesses would need to manually process credit card transactions, which can be time-consuming and error-prone.
Additionally, customers are more likely to trust businesses that use a trusted and secure payment gateway, as it helps to protect their sensitive financial information.
Overall, payment gateways are an important tool for ecommerce businesses to ensure the security and ease of online transactions.
They allow businesses to accept online payments conveniently and securely, reducing the friction of transactions and enabling them to scale and grow their businesses.
What is an e-Commerce Payment Gateway?
A payment gateway is a software application that enables the secure transfer of card/bank information from a website to the payment network for eCommerce payment processing. Then it returns transaction details and responses from the payment network to the website. Although online transactions appear quick and straightforward, several processes work together at the backend to move funds seamlessly and securely from buyer to seller.
How does an e-Commerce Payment Gateway Work?
The motto behind payment gateways is to make payment processing effective, secure, and hassle-free. Instead of transmitting payments, the payment gateway approves the funds transferred to the seller and does so safely and securely for the buyer. Payment gateways even observe PCI compliance standards to prevent fraud, introducing various security techniques as expected. Below are the steps showing how the payment gateway for eCommerce works:
Step 1: The process starts when customers place an order on an eCommerce website and fill in their credit card essentials.
Step 2: The web browser encodes the data sent between it and the merchants’ web server.
Step 3: Next, the gateway sends the transaction data to the payment processor used by the merchant acquiring bank.
Step 4: The payment processor sends the transaction data to a card affiliation.
Step 5: The credit card’s issuing bank sees the approval request and “approves” or “denies.”
Step 6: The processor then forwards an approval related to the merchant and customer to the gateway.
Step 7: Once the gateway acquires this reaction, it transmits it to the site/interface to process the payment.
Step 8: ‘Clearing Transactions’ is activated once the merchant has completed the transaction.
Step 9: The issuing bank changes the “auth-hold” to a debit, permitting a “settlement” with the vendors’ securing bank.