how payment gateway works

A payment gateway is a service that processes payments in online stores.  It processes credit cards and debit cards at both online and offline stores. A payment gateway transfers important information between websites or mobile devices and payment banks/ processors.  Thus if you decide to integrate payment into your business site and make the user experience smooth, go for a payment gateway to deal with all the financial transactions online.

Why Is Payment Processing Integration Important?

Buyer payment preferences have changed everything, so every type of business must provide their customers the ability to pay in several ways, and so accepting debit and credit cards along with with mobile payments and even PayPal payments is no longer only an option but has become a necessity.

How Does An Integrated Payment Gateway Work

  1. When you press the “buy” button at checkout, then the browser encrypts the payment details and sends them to the merchant’s web server via SSL connection.
  2. After that, the merchant sends the details to a gateway via an encrypted SSL connection.
  3. Now, the payment gateway sends the information to the payment processor, which forwards it to the card association.
  4. Now the authorized bank that issues the credit or debit card receives an authorization request and sends a response code back to the payment processor, which sends the response code on to the gateway, and it’s forwarded back to the site from there.
  5. The website displays a relevant message to you. The whole process takes as little as  3 to 5 seconds only.

Benefits Of A Payment Gateway

  • There Are No Security Concerns
  • Ease Of Signup
  • Your Site Does Not Need To Be PCI Compliant
  • Reduce Late And Failed Payments
  • No Need To Maintain The Payment Gateway
  • Lower Transaction Fees
  • Integration Increases Your Cash Flow
  • Saves Time And Reduces Human Error

Disadvantages Of A Payment Gateway

  • Your Customer Has To Leave Your Website To Make The Payment
  • Sometime Your Customer Might Not Be Redirected To Your Website After The Payment Because Of A Network Error.
  • A Method Like This Is Prone To A Man-In-The-Middle Attack 

Whether you are choosing a payment gateway or planning to make your own payment portal, it is always a profitable solution for an online seller.  Keep in mind that websites using an inbuilt payment system are more trusted by buyers. If you are looking for a way to improve customer confidence, then you must integrate a payment solution because it will inspire trust, be protected from fraudulent actions and support multiple payment methods.