Payment methods can be cash, credit cards, or non-cash electronic methods. Credit cards allow consumers to make purchases exceeding their available cash by extending credit from the card issuer. Online payments involve transmitting payment data rather than physically exchanging cash. The online payment process includes a customer providing card details to a merchant's secure site, the merchant sending this to a payment gateway, the gateway sending it to the acquiring bank, the bank sending it to the card issuing bank for verification of available funds, the issuer bank responding approval or decline back through the chain of entities, and the merchant displaying the transaction result to the customer.

1. Payment

2. A key component to conducting business is accepting payment. At a high level, payment seems very simple: A buyer receives some type of value from the product or service purchased, and in return, the seller receives some from of payment.

3. Bricks and Mortar

4. Type of PaymentsCash The simplest form of paymentIssues: Theft Cash Fees

5. 2. Credit Cards Another popular form of payment. Credit cards, in additional to the convenience of not having to handle cash, allow consumers to extend their purchasing power. As a result, these cards are often used for larger purchases, where the consumer may not have enough cash on hand to complete the transaction.

6. E-commerce( do not require the physical transfer of payment but involve only data transfer )

9. Step 1: A customer is making a purchase at an online shop. They are prompted to enter their credit card details on a secure page.

10. Step 2: The online shop sends the transaction message to the payment gateway.The Payment Gateway performs validation on the transactionTo confirm the required information is present and is in the correct format

11. Step 3: The payment gateway sends the transaction message to the bank.In online payments terminology this bank is known as the Acquiring Bank. They carry out various checks on the Transaction Message to ensure it is valid and that the transaction is not fraudulent. The Acquiring Bank determines who the Card Issuer is. The Transaction Message is converted into the message format required by the Card Issuer.

12. Step 4: The acquiring bank sends the transaction to the card issuer. The Card Issuer validates the information and confirms there is sufficient funds available. The Card Issuer decides to approve or decline the transaction.

13. Step 5: The card issuer sends the response message to the acquiring bank. The Acquiring Bank validates the information contained within the response message. They update their systems with the transaction result.

14. Step 6: The acquiring bank sends the response message to the payment gatewayThe Payment Gateway validates the response information and then updates their system with the result.

15. Step 7: The payment gateway sends the response message to the online shop.The Online Shop verifies that the response message came from the Payment Gateway.They validate the contents of the response to confirm the information is correct. They save the result of the transaction in their system. Based on the transaction result the Online Shop determines which page to present to the user.

16. Step 8: The online shop displays the result of thecustomers online payment transaction.This is the final step in the authorisation process. This process typically takes less than 5 seconds end-to-end to complete.