Understanding Payment Gateways
A payment gateway is a merchant service provided by an e-commerce application service provider that authorizes credit card or direct payments processing for e-businesses, online retailers, and traditional brick-and-mortar stores. It plays a pivotal role in the digital transaction process by encrypting sensitive data and securely transmitting it between the customer and the acquiring bank.
The Necessity of Payment Gateways
Payment gateways are essential for any business that wishes to accept https://rik88.bet/
https://1go88.vip/ online payments. They serve as a digital bridge, ensuring transactions are completed swiftly and securely. The technology involved sends financial data to relevant parties, authorizing payments and facilitating the transfer of funds from the customer’s bank to the merchant’s account.
How Payment Gateways Operate
The operation of a payment gateway involves several key stakeholders:
Merchant: The business selling goods or services.
Customer: The individual making the purchase.
Issuing Bank: The financial institution where the customer’s account is held.
Card Schemes: Credit card companies such as Visa, MasterCard, Discover, etc.
Acquiring Bank: The financial institution holding the merchant’s account.
Transaction Steps:
The customer initiates the purchase by clicking the “Pay Now” button on the merchant’s website.
The payment gateway verifies with the issuing bank if sufficient funds are available and ensures the transaction amount is within the credit limit or account balance.
After verification, the payment gateway sends encrypted credentials to the card schemes for processing.
The card scheme approves and relays the information back to the merchant’s website to finalize the transaction.
The payment gateway then instructs the acquiring bank to transfer money from the issuing bank to the merchant’s account.