A payment gateway is an e-commerce application service provider that authorizes online payments for shopping carts. The payment process involves a transaction between a user and merchant. There are two types of accounts - a business account for the user and a merchant account for the owner. The payment gateway encrypts transaction details and passes them to the acquiring bank, then to the issuing bank, which approves or declines payment. The response is then sent back through the payment gateway to the merchant server and customer. Common payment gateways include PayPal, Authorize.Net, and Citrus Pay. Gateways provide security and allow credit card validation, processing, and reporting in real time. However, gateways also charge fixed monthly, percentage,

1. Payment Gateways
Niyasudheen A K
A -42

2. What is Payment Gateways?
• A Payment Gateway is an E-Commerce application service provider
service that authorizes payments for E-Business (Online Shopping Carts)
• Before going to the payment gateways first we need to know the following
the following items

3. Terms which are related to payment gateway
• E-Commerce
• Web Services
• Payment Process

4. Payment Process

5. Payment Process
• A payment process is nothing but an transaction of money
between the users and merchant (owner of the product)
• In payment process we need there are two types of accounts
• Business Account ( user)
• Merchant Account (owner)

6. Working of Payment Gateway
• Visitors places the order on the website and its sent to the merchant web server in
encrypted format. This is usually done via SSL ( Secure Socket Layer ) encryption. Content
organisation
• The transactions details are then forwarded to the concerned Payment Gateway
• The transaction information then passed on to the merchant acquiring bank by the payment
gateway
• Merchant acquiring bank then forwards the transaction conformation to the issuing bank
(one that issued the credit card to the customer)

7. Continue..
• Then the card issuing bank sends a response back to the payment gateway.
The response includes information that whether the payment has been
approved or declined. In case the declination the reason is also sent in the
response
• The response is then forwarded by the payment gateway to the merchant
server
• At merchants server the response is encrypted again and is relayed back to
the customer. This allows the customer to know whether the order has been
successfully or not
• The entire process typically takes less than 5 seconds

8. Types of Payment Gateways
• Paypal ( Global)
• Authorize. Net (us)
• Protx (uk)
• Citrus Pay Payment Gateway (India)
• CCAvenue Payment Gateway (India)
• Bill Desk (India)
• PayUBiz India Payment Gateway (India)
• World Pay (Global)

9. Payment Gateways Advantages
• Gateways can provide many benefits, its main benefit being security.
• Credit Card Validation and processing in real time
• Less Fraud
• Money is normally deposited into your bank automatically
• Reports and refunds normally allowed via browser by gateways company

10. Payment Gateways Disadvantages
• Fixed fee per month
• Percentage fee per amount spent
• A fixed fee per transaction
• Bank or gateway bank will charge a merchant fee for the privilege of
following credit card purchases , this can range from 1-5% or more