How Does Payment Gateway Integration Works?
Payment gateway integration is a must for every eCommerce portal or an online store
. Payment gateway is the secure and safe online link that helps monetary transaction between merchant and the acquiring bank.
A payment gateway system performs a set of tasks to carry a defined transaction between a payment medium (which may be a website, mobile phone, etc.) and the front end bank or processor. On the internet, whenever the customer orders a product or a service from a merchant's payment gateway, a series of tasks is carried out by the payment gateway in order to process the preferred transaction.
Check How the Process Work
First of all customer places an order from a web portal
If the order is through a website, the customer's web browser encrypts the information to be sent between the browser and the merchant's bank server. This is perfectly carried out through SSL encryption.
Later the merchant forwards this transaction details to payment gateway. This is one more SSL encrypted connection
Merchant forwards transaction details to their payment gateway. This is another connection secured by SSL to the payment server hosted by the payment gateway system.
Once the payment gateway get the transaction information, it forwards it to the payment processor used by the merchant's acquiring bank.
Further, the payment processor system forwards the transaction information to the card association (Visa/MasterCard etc)
Then, the card association forwards the transaction to the right card issuing bank.
When the bank receives the authorization request, it carries out fraud and credit or debit checks and then sends back the response to the payment processor system including a response code.
This response code defines the reason for the transaction failure giving the appropriate quotes according to the situations.
In the meantime, the credit card issuer holds an authorisation associated with that merchant and consumer for the approved amount. This restricts the ability of a consumer to spend more than the stipulated amount.
The authorisation response is further forwarded by the payment processor system to the payment gateway.
It forwards the response to the website, where it is displayed as relevant response and then retrieved back to the merchant and cardholder. This is known as authorization or Auth
Later the above process is repeated when the merchant fulfills the order. This time it is done to clear the authorization by completing the transaction. This results into the clearing the authorization and prepares merchants to settle with the merchant bank.
Via the processor the settlement is carried out completely when all the responses from merchant side is approved and authorized.
This entire process is carried out under strict security encryption and the settlement of the funding most probably takes within to 3 days.
Article Source:
How Does Payment Gateway Integration Works?by: Anna Harris
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