Payment Gateways.

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INTRODUCTION TO GATEWAY

A payment gateway is an e-commerce service that authorizes payments for all kinds of businesses. It transfers information between shopper and merchant. Eg. E-businesses, online retailers, or traditional, brick-and-mortar stores.This is the actually third party service. The payment gateway is the system that allows a merchant to accept credit card and other forms of electronic payment. In other word payment gateway is communication link between store and integrated billing processor where electronic payment take place automatically.

Why use payment gateways?

Just because of building various website and due to introducing new hi-tech technology businesses are flocking in e-commerce arena. Buying and selling products and services online become easier and easier day by day. Any business that can’t process online payment is defiantly missing huge customer base. Due to today’s fast life online payment and purchasing is the best option. Online business is always attacked by fraud but modern payment processing includes multiple security measures that verify every credit card number and try to stop potential crime before transaction.

Setting up gateway

For payment gateway to work,user  just have to set up an account. While signing up, they will give customer id or something similar. We just have to login and add products to shopping cart.

How payment gateway works?

When a customer place order on website from a payment gateway-enabled merchant, variety of task performed by payment gateway to process the transaction. A customer places order on website by pressing the ‘submit’ or equivalent button, or perhaps by entering their card details using an automatic phone answering service.
• If the order is via a website the customer’s browser encrypts the information to be sent to the merchant’s server, via ssl (secure socket layer) encryption.
• Without redirecting the customer away from the website, PCI-DSS compliance obligation of merchant will reduce if payment gateways allow transaction data to be sent directly to gateway.
• The transaction detail then forwarded to their payment gateway.
• The transaction information from payment processor forwarded to card association. Eg. Visa/master card.
• Bank who issued that credit card receives the authorization request and it will check fraud check for debit/credit and then send response with response code back to gateway processor. Different payment gateway supports  various features. (eg. Fraud detection, virtual, recurring fees)
• If authorization request is failed, the response code is used to define reason why transaction failed
• The authorization response then forward to the payment gateway.
• Received response forwarded where it is interpreted as appropriate response then transfer back to merchant and card holder. This is known as authorization.
• For settlement via processor merchant submit all approved authorizations, in a batch, to bank.
• Then batch settlement request is sent to credit card issuer from acquiring bank.
• The credit card issuer makes settlement payment to bank.

Security with payment gateway

If we look around for the payment gateways we have the following giants ICICI Bank, CITI Bank, PAYPAL, CC AVENUE, EBS, Direct Pay etc. If we talk about Cost almost each gateway costs some installation cost along with commission on each transaction. The transaction cost is somewhere between 4-7% of the transaction amount but on higher volume one may negotiate with them. Before choosing a gateway always see that what are the options, they are providing for transaction. The main criteria is that do they provide off-hour support if you trap in any problem??
For placing order through payment gateway customer is usually required to submit personal detail. Therefore entire communication “submit page” is carried out through https protocol.
Payment gateways protect sensitive credit card datathrough special encryption.

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