Online and digital payments have become an integral part of our lives. Apart from being readily available, they are convenient too. The payment gatewa
Online and digital payments have become an integral part of our lives. Apart from being readily available, they are convenient too. The payment gateways can charge the individual for the usage or be a free payment gateway.
Now that online transactions are here to stay, one must understand the concept of the payment gateway and its functioning. Payment gateways allow transactions through multiple payment options, such as debit cards, credit cards, net banking, and NFCs in mobile, like e-wallets.
What do you understand about a Payment Gateway?
In simple terms, a payment gateway is an online path that connects an individual’s bank account to the platform where the transaction is to be done. It is a software platform with a tie-up with the retailer and is authorized to allow you to make the transaction via it. It is a third party to the transaction that ensures a secure money transfer and completes the transaction.
What are the various entities involved in a Payment Gateway?
There are five entities that work with a payment gateway.
|Issuer||Financial institutions where the account is held|
|Card Holder or Account Holder||The account holder of the bank and the cards|
|Acquirer||The financial institution that has contracts with the merchants|
|Merchant||He offers the software or the service over the web or an app and accepts the payments made.|
|Card Networks||Infrastructure providers like Visa and Mastercard|
How does a Payment Gateway function?
The payment gateway process in simple terms is explained below. It encompasses the following steps.
- The customer places his order online by d clicking on the Buy tab to initiate the purchase and choose from the multiple payment options provided.
- If the customer chooses to make a card payment, the payment gateway takes the user to the bank’s page or a 3D secure page post, prompting him to enter the card details. It requests authorization of the transaction from the customer.
- Once the payment gateway receives the authorization, the issuing bank checks the user’s balance.
- The issuing bank either sends a ‘yes’ or ‘no’ to the payment gateway based on the balance sufficiency. If the answer is ‘no,’ the payment gateway sends an error message to the merchant, and if it is a yes, the merchant seeks the transaction from the bank.
- The bank settles the amount to the payment gateway. The payment gateway determines it to the merchant.
Once the process is completed, the user receives a transaction success message with the details. Near field communication or NFC in mobile or NFC enabled card also follows similar steps. NFC in mobiles is also used in contactless cards.
Our Payment Gateways Secured?
Payment gateways follow regulations to ensure the safety and security of sensitive data.
- The entire transaction is on HTTPS and not on HTTP. HTTPS is a secure tunnel.
- Due to the hash function, a signed request from the merchant is used to verify and authorize the transaction request. The signed request is a secret code known only to the merchant and payment gateway.
- VPA or Virtual Payer Authentication with additional 3 D security protocols adds an extra layer to secure the system.
- The IP of the requesting server is always scanned for any malicious activities.
Choosing the Payment Gateway
The merchant must choose the right and authentic payment gateway for his eCommerce platform to secure the transactions. The common features to consider while choosing a payment gateway are:
- Flexible Integrations
- PCI Compliance
- Multi-Currency acceptance
- Fast set up a time
- Checkout time is faster
- Mobile optimization
- Safe and Secure features
Benefits of Payment Gateway
Apart from easy and convenient transactions, the payment gateway also offers the following benefits:
PCI DSS Wallet
Usage of the PCI DSS enables the user to save his personal data with security on the portal. For example, if the individual is a frequent purchase from a platform, he can have his card details there.
White Label Wallet
This wallet is the current trend. It enables the user to make payments over the mobile using mobile wallet apps. The wallet balance can be maintained by transfer from the bank.
Fraud screening tools are present in the payment gateways. The tools include CCV, CCV, or an OTP. They ensure that the transaction remains free from fraud.
Payment gateways aid in making the transaction easy and adding to the customer experience. Money and other sensitive data are involved in the traction process. Both paid or free payment gateway charges practice enough security protocols to secure users’ sensitive data and avoid fraudulent transactions. These gateways are a big step towards a digital India.