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What is Payment Gateway? And how do it Works

Payment Gateway is the e-commerce application by merchants permits payments for online sales, and provides you to accept the credit card information over the internet of your beloved customers. Nowadays Payment Gateway is a highly securated tool to accept payment Online. It acts as an intermediary between the customer’s bank issuing credit card and the payment processor company.

HOW DO PAYMENT GATEWAY WORKS?

payment gateway procedure

Payment gateway an strongest tool in website that transform information between a payment portal.

It works normally as a customer pay in a restaurant or the mortar/retail store he shops. But the payment gateway is also simple and kept straight forward to the customer who will be making the payment.

Following are the steps by which payment gateway works

Step 1– A customer browse on the e-commerce website and he place the order as he likes the product.  and enter the card information.
Step 2– The customer then fills the necessary details on the available site. The encrypted data is first being transmitted to the merchant business with the proper order confirmation.
Step 3– This encrypted data is then send to the credit card association like visa, master card or any other credit card company. This company charges an interchange fee for the per transaction.
Step 4– In this step the transaction is approved or denied which means the card number entered by the customer is proper and it has enough funds so the transaction can be processed.
Step 5– In this step transaction is being authorized. The credit card company that is the issuing bank sends the confirmation to the payment processing network company.

The authorization starts with a credit card issuing company then back to the merchant business. Finally goes back to the e-commerce website through the payment gateway.
Step 6– After all this steps as it takes matter of seconds within 24 to 48 hours funds are been transferred to the merchant account.

WHY DO I NEED PAYMENT GATEWAY?

If you are running your business online you will definitely require the payment gateway to accept the credit card payment over the internet. Because without payment gateway you will be unable to process the transaction or charge your customer.

Considering payment gateway it is the situation where “card is not present” for the transaction. The customer will enter the relevant details of his/her card but the merchant will not be able to see a single



This post first appeared on How Far A Merchant Account Is Essential For Small Business?? | Radiant Pay Official, please read the originial post: here

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What is Payment Gateway? And how do it Works

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