The document explains the technical process of payment gateways, which are services provided for processing transactions in e-commerce. It outlines the steps involved in a payment transaction, starting from the customer placing an order to the authorization and confirmation of the payment through various financial entities. A payment gateway acts as a secure intermediary that facilitates the transfer of information and funds between customers and merchants.

1. Payment Gateway Process
HOW DO PAYMENT GATEWAYS WORK TECHNICALLY?
1

2. e-Commerce Transaction 2

3. Online Payment Process 3

4. Payment Gateway Process 4

5. A payment gateway is a merchant service provided by an e-
commerce application service provider that authorizes credit card
or direct payments processing for e-businesses, online retailers,
bricks and clicks, or traditional brick and mortar. The payment
gateway may be provided by a bank to its customers but can be
provided by a specialised financial service provider as a separate
service such as a payment service provider.
A payment gateway facilitates a payment transaction by the
transfer of information between a payment portal and the front end
processor or acquiring bank.
5

6. A Payment Gateway is a middle-man that securely takes money
from your customers and sends it to your bank account. Payment
Gateway is a processor that helps in authenticating and
authorizing transactions between your customer and your bank.
The payment gateway process starts with a customer placing an
order from a payment gateway-enabled seller/merchant.
6

7. e-Commerce/Online Shopping 7

8. e-Commerce/Online Shopping 8

9. When a customer orders a product from a payment gateway-
enabled merchant, the payment gateway performs a variety of
tasks to process the transaction:
• Buyer selects the product, clicks on BUY Button initiating the payment from the
merchant's website where user info is collected
• This info is sent to the payment gateway / payment aggregator
• Payment aggregator collects card info in a secure server and passes this
through its Acquiring Bank (Payment aggregator's bank) to the Card networks
like VISA, MasterCard
• The Card Network checks with the Issuing bank (Customer Bank) whether the
transaction can be authenticated or not.
9

10. POS Transaction 10

11. Debit/Credit Card Transaction 11

12. If everything is correct here, consumer a/c or card is debited by
the Issuing bank:
• Issuer bank sends confirmation to the card network
• This is further notified to the acquiring bank and then to the payment
aggregator
• Payment aggregator now send a confirmation to the Merchant, who further
informs the consumer
• The consumer also gets notified by his bank (issuing bank) about the
transaction
12

13. Thank You!
ME@SHASHIDHARKUMAR.COM
SHASHIDHARKUMAR.IN
13