How does payment gateway integration worksDocument Transcript
How Does Payment Gateway Integration WorksPayment gateway integration is a must for every eCommerce portal or an onlinestore. Payment gateway is the secure and safe online link that helps monetarytransaction between merchant and the acquiring bank.A payment gateway system performs a set of tasks to carry a defined transaction between apayment medium (which may be a website, mobile phone, etc.) and the front end bank orprocessor. On the internet, whenever the customer orders a product or a service from amerchants payment gateway, a series of tasks is carried out by the payment gateway in orderto process the preferred transaction.Check How the Process Work
» First of all customer places an order from a web portal» If the order is through a website, the customers web browser encrypts the information tobe sent between the browser and the merchants bank server. This is perfectly carried outthrough SSL encryption.» Later the merchant forwards this transaction details to payment gateway. This is one moreSSL encrypted connection » Merchant forwards transaction details to their payment gateway. This is another connection secured by SSL to the payment server hosted by the payment gateway system. » Once the payment gateway get the transaction information, it forwards it to the payment processor used by the merchants acquiring bank. » Further, the payment processor system forwards the transaction information to the card association (Visa/MasterCard etc) » Then, the card association forwards the transaction to the right card issuing bank.» When the bank receives the authorization request, it carries out fraud and credit or debitchecks and then sends back the response to the payment processor system including aresponse code.» This response code defines the reason for the transaction failure giving the appropriatequotes according to the situations.» In the meantime, the credit card issuer holds an authorisation associated with thatmerchant and consumer for the approved amount. This restricts the ability of a consumer tospend more than the stipulated amount.» The authorisation response is furtherforwarded by the payment processor systemto the payment gateway.» It forwards the response to the website,where it is displayed as relevant response andthen retrieved back to the merchant andcardholder. This is known as authorization or“Auth”» Later the above process is repeated whenthe merchant fulfills the order. This time it isdone to clear the authorization by completingthe transaction. This results into the clearing the authorization and prepares merchants tosettle with the merchant bank.» Via the processor the settlement is carried out completely when all the responses frommerchant side is approved and authorized.This entire process is carried out under strict security encryption and the settlement of thefunding most probably takes within to 3 days.