Payment gateways are interfaces that allow merchants to accept electronic payments from customers. They connect online stores and point-of-sale terminals to payment processors, who transfer funds from customers' bank accounts or credit cards to merchants' bank accounts. Payment gateways come in different types depending on their technical requirements and may charge merchants various fees for their services. They enable secure transactions between customers and merchants in both online and physical stores.

1. Ayush sharma

2. What Is a Payment Gateway?
• Payment gateways are the consumer-facing interfaces used to collect
payment information.
• In physical stores, payment gateways consist of the point of sale (POS)
terminals used to accept credit card information by card or by
smartphone.
• In online stores, payment gateways are the “checkout” portals used to
enter credit card information or credentials for services such as PayPal.
• Payment gateways are distinct from payment processors, which use
customer information to collect payments on behalf of the merchant.
• There are also payment gateways to facilitate payment in
cryptocurrencies, such as Bitcoin.

3. • COM Based Gateway- requires that you install a software called a DLL
provided by the gateway company on your web hosting server also it requires
you to have your own SSL certificate
• XML Transport Gateway-do not require a DLL . They however require SSL
Certificate
• FORM Based Gateway-they don’t require any extra software to be installed
on your web hosting server . some ,but not all require SSL certificate

4. Advantages and disadvantages (for users)
 Advantages
1. Credit card validation and processing in real time
2. Money is normally deposited in bank account automatically (transparency)
3. Reports are auto generated for users
4. Doesn’t need special user deployment (a browser is adequate)
 Disadvantages
1. Fixed fee per month
2. Percentage fee per amount spent
3. Fixed fee per transaction
4. User bank or the gateway’s bank will charge a merchant fee for the privilege of
allowing credit card purchases .This can range from 1 to 5 percent or more

5. How payment gateway works
• The following steps explain how funds are transferred to your bank account when customer pays through credit card:
1. A customer submits the credit card transaction to the Payment Gateway via a secure connection from your Web site.
2. Payment Gateway receives the secure transaction information and passes it via a secure connection to your bank’s processor (a
financial partner that provides credit card processing on behalf of the credit card associations, for example, Visa or Master Card).
3. Your bank’s processor submits the transaction to the Credit Card Interchange (a network of financial entities that communicate to
manage the processing, clearing, and settlement of credit card transactions).
4. The Credit Card Interchange routes the transaction to your customer’s Credit Card Issuer.
5. The Credit Card Issuer approves or declines the transaction based on the customer’s available funds and passes the transaction results,
and if approved, the appropriate funds, back through the Credit Card Interchange.
6. The Credit Card Interchange relays the transaction results to your bank’s processor.
7. Your bank’s processor relays the transaction results to the Payment Gateway.
8. Payment Gateway stores the transaction results and sends them to you and/or your customer.
9. The Credit Card Interchange passes the appropriate funds for the transaction to your bank, which then deposits funds into your
merchant bank account.

6. Online Payment Flow

7. Applications of payment gateway
• Large banks such as Bank of America (BAC) and JPMorgan Chase
(JPM) have sophisticated payment gateway systems that they offer
to customers along with their own merchant acquiring bank services.
Ultimately, merchants can choose a variety of payment gateway
technologies as long as they are compatible with the merchant
acquiring bank that is being used for payment processing.1
• One recent example of a payment gateway is Square (SQ), which
emphasizes flexible mobile payments for retail businesses. The
company’s Square Reader technology allows customers to easily
accept payments at ad-hoc locations such as conventions or
farmer’s markets, or through roaming storefronts such as food
trucks.2
• With the Square Reader payment gateway technology, a merchant
can attach a small piece of hardware to their mobile phone which
allows the customer to swipe their payment card for processing
through the mobile phone’s electronic connection. The Square
Reader sends the payment information to a merchant’s acquiring
bank which then processes the information for the merchant
momentarily.
• It is likely that new products will continue to increase the versatility
and speed of payment gateways. In recent years, blockchain
startups have even introduced payment gateways
for cryptocurrencies.

8. Types of Payment Gateways
• PayPal (Global)
• Authorize Net (US)
• VeriSign (Global)
• Link point (US)
• 2 Checkout (Global)
• Cyber Source (US)
• Protx (UK)
• EWay (AU)
• Moneris (CA)
• QuickBooks Merchant Services (US Only)

9. White label payment gateway
some payment gateways offer white label services, which
allow payment service providers, e-commerce platforms, ISOs, resellers,
or acquiring banks to fully brand the payment gateway’s technology as
their own.[4] This means PSPs or other third parties can own the end-
to-end user experience without bringing payments operations—and
additional risk management and compliance responsibility