A payment gateway is software that allows online retailers to process banking and credit card information. It is a technology that captures and transfers the payment data from the customer to the acquirer. Payment gateway makes online payments easy for consumers and businesses. In simple language, the payment gateway integration works as the middleman and making sure that the transaction is carried out secretly and promptly between the customer and the merchant. The gateway manages all the customer’s delicate card credentials or information between the acquirer and the merchant during the payment process. The payment gateway works as a security guard of all the payment data or information of the customer.
In the present time, everyone knows the utilization of online installment as it is the major element that each web-based business stage on the planet offers. This office is incorporated with an installment passage. These online installments are quick and advantageous as they permit you to purchase items and execute from everywhere in the world. For beginning an installment door combination you simply need a nice web association. It is done through various installment modes like net banking, check card, Mastercard, UPI, or whatever other online wallets that are accessible nowadays.
Importance of Payment Gateways
India is becoming cashless especially in this covid times, people are avoiding cash transactions and relying more on online payment methods. Payment gateways can tie-up with the small stores that sell essential items and are about to establish an online presence.
Here are the reasons that prove the importance of a payment gateway:
- Data is encrypted and secure
- Easy to set up
- Merchants can manage and customize their checkout pages
- Protects online business from fraud
- Determine long term success of the online business
- Reduce the frequency of credit card fraud
- Easy integration
- Fast processing speed
- Multiple payment options
- Multiple buyers at the same time
How does it work?
Now we know the importance of a payment gateway. It’s time to understand the whole transaction process or how the payment gateway works throughout the payment journey:
- The client picks the item that they need to purchase or buy and afterward continues to the installment page, most installment gateways lead you to numerous payment pages like hosted payment page, server to server integration, client-side encryption.
- As they reach the payment pages, they have to enter their card details like CVV number, cardholder’s name, card expiration, etc. Now, this data is securely passed onto the payment gateway based on the payment pages you selected.
- Payment gateways secure or encrypt these details and check for any frauds if any, then send the card data to the acquiring bank.
- These acquiring banks send the information to the payment processing networks like Visa, Mastercard, etc.
- Payment processing networks perform fraud checks and then send the payment data to the issuing bank.
- Subsequent to playing out the screening by the installment pages, the responsible bank approves the exchange. The endorsed installment messages are sent back to the card plans, then to the acquiring bank.
- The gaining bank sends the endorsement to the installment passage at that point and communicates the message to the trader. When the installment gets supported the acquirer gathers the installment sum from the responsible bank and holds the sum to the merchant account.
- The settlement takes place in which the funds get deposited into the merchant’s account.
- The merchant displays a payment confirmation page based on the message or asks the customer to provide another payment mode.
For accepting online payments it is necessary to have a merchant account. The merchant account can be issued by your PSP, payment gateway, or any other financial institution.
How to Choose a Safe Payment Gateway Integration?
By knowing customer’s expectations from a payment gateway you can make out how to choose a secure payment gateway. The main point while considering a payment gateway is security.
The questions that have to be considered are:
- What type of payments do your customers use?
- The fee or the charges of the payment gateway.
- What standards they put in to ratify security provisions.
- Their image or reputation in the market.
A good payment gateway includes features like multiple payment modes, competitive pricing options, good success rates, insightful dashboard, zero maintenance charges, provide offers, discounts, EMI’s, and accept recurring payments without an app or website.
The large and reputed payment gateways that are considered by most people are such as Apple Pay, Amazon Pay, and PayPal. Brand recognition works in the business’s favor by highlighting the security and allowing customers to continue hassle-free shopping. Customers trust established payment gateways they have heard of and that are available in the market. By doing this, you can ensure the customer’s credit or debit card information isn’t stored on the website but on a trusted platform. This is important for new businesses that have less brand recognition. So, this is how payment gateways integration works that include multiple people and payment that takes just a few seconds to go through.