Thursday, March 19, 2009

Payment gateway systems

A payment gateway is an e-commerce application service provider service that authorizes payments for e-businesses, online retailers, bricks and clicks, or traditional brick and mortar. It is the equivalent of a physical point of sale terminal located in most retail outlets. Paymentgateways encrypt sensitive information, such as credit card numbers, to ensure that information passes securely between the customer and the merchant.


The service that automates the payment transaction between the shopper and merchant. It is usually a third-party service that is actually a system of computer processes that process, verify, and accept or decline credit card transactions on behalf of the merchant through secure Internet connections. The payment gateway is the infrastructure that allows a merchant to accept credit card and other forms of electronic payment. When referring to payment gateways used for Internet transactions, it may also be called an IP payment gateway

What is a Payment Gateway?


In order to process credit card transactions online a database is created that immediately checks the transaction and then captures the funds to be deposited later in the merchant's account.


Online Payment Gateway – what is that?


Payment Gateways are usually a third party service that automates the transactions between the customer and the merchant. A payment gateway is a system that processes, verifies and accepts the credit card transactions on behalf of the merchant. Business owners are able to accept all kinds of electronic payment through these secure internet connections.


Why get an Online Payment Gateway?

Payment Gateways make real time online credit card processing possible. When a credit card transaction is made, it checks for validity, encrypts the transaction details, ensures its departure to correct destination and decrypts the responses that are sent back.
A Payment Gateway also helps you to accept:
• Credit Cards – it allows the clients to get real-time credit card authorization either via secure servers or via http with payment gateways.
• Electronic Checks – many payment gateways also help process electronic check transactions online or in real time.

The customers do not need to be directly in contact with the gateway, as the data is sent to the gateway via shopping carts and secure server. The shopping cart uses plug-ins to send information to certain gateways in an acceptable format.
Relation between a Merchant Account and the Payment Gateway
A merchant account allows the business owners to process all kinds of credit cards online and the payment gateway is a means of transportation that passes the credit card information from the merchant accounts to banks for processing the charges. So in order to process your credit cards online you require both, but most importantly you require the payment gateway.
InstaBill provides merchants with a merchant account that comes complete with a payment gateway that many other companies may not provide.


What are the Advantages of an Internet Payment Gateway?

The internet payment gateway automates the transactions between the customer and the merchant. A Payment Gateway is a system that processes, verifies and accepts the credit card transactions on behalf of the merchant. Business owners are able to accept all kinds of electronic payments through secure internet connections.


Advantages of the Internet Payment Gateway

In the fast paced e-commerce world the success of your business largely depends on your internet payment gateway service as well. There are many advantages of an internet payment gateway; some of them are given below.

An Internet Payment Gateway provides you with:
• Shopping Cart – one of the features that most merchants have on their site is the shopping cart facility which allows the customer to choose various items to purchase from the website. The internet payment gateway must allow integration of the shopping cart facility…I
• Virtual Terminal – it allows you to manually enter transactions that are received through any kind of electronic or internet connection.
• Security – has become one of the key issues in the e-commerce industry.
• Secure Server – one of the major advantages of an internet payment gateway is that they provide you with a secure server.
• Easy to use
• Scalability – internet payment gateway providers server must grow with the merchant’s business, otherwise the business might get future problems.
• Online Payment Options – internet payment gateways must provide its users with a variety of options when it comes to online payment. These include acceptance of international credit cards like Visa, Master card, debit cards etc.
• Processing Credit Card Orders – the internet payment gateway must allow the merchants to process online credit card orders in real time.
• Unlimited Users – most payment gateways provide access to an unlimited number of users at the same time for credit card transactions.
• Fraud Detection – to avoid scam the internet payment gateways also provide fraud screening tools. The credit card transactions are saved in the payment gateway rather than on the website and this helps prevent fraud.


How does a Payment Gateway works?

Internet Payment Gateways make real time online credit card processing possible. The data is sent to the gateway via shopping carts and a secure server. When a credit card transaction is made, the payment gateway checks for validity, encrypts the transaction details, ensures its departure to correct destination and decrypts the responses that are sent back. It is very useful for e-commerce businesses.


How an Internet Payment Gateway works

The internet payment gateway automates the transactions between the customer and the merchant. The payment gateway performs various tasks for the transaction process. Some of them are given below:
• Encryption – once a customer places an order through a website, the browser encrypts that information through a secure server encryption.
• Payment Server – the information sent back by the merchant is sent to a relevant bank which acquires that information and then sends back the transaction information for authorization to the card issuing bank.
• Authorization – that bank then sends back an authorization request, either acceptance or denial, to the payment gateway.
• Confirmation – the internet payment gateway then sends back the relevant information to the website and the customer respectively.
• Fund Deposit – the acquiring bank then deposits the funds into the merchant’s account.
• Reporting – because of the internet payment gateway facility, the merchants can view their fund report online or download it for their convenience.

This may seem like a long process, and it is, but it takes only a few seconds.
For a merchant, doing business online has now become an easy process. Internet payment gateway allows the business owner to process all kinds of credit cards online.

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