How do payment gateways work technically? What is an Internet Payment Gateway and How Does it Work? How Payment Gateways Work | Payment Processing

1. Payment Gateway Process
HOW DO PAYMENT GATEWAYS WORK TECHNICALLY?
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2. e-Commerce Transaction
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3. Online Payment Process
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4. Payment Gateway Process
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5. 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, bricks and clicks, or
traditional brick and mortar. The payment gateway may be provided by a
bank to its customers but can be provided by a specialised financial
service provider as a separate service such as a payment service provider.
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A payment gateway facilitates a payment transaction by the transfer of
information between a payment portal and the front end processor or
acquiring bank.

6. A Payment Gateway is a middle-man that securely takes money from your
customers and sends it to your bank account. Payment Gateway is a
processor that helps in authenticating and authorizing transactions
between your customer and your bank.
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The payment gateway process starts with a customer placing an order
from a payment gateway-enabled seller/merchant.

7. e-Commerce/Online Shopping
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8. e-Commerce/Online Shopping
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9. When a customer orders a product from a payment gateway-enabled
merchant, the payment gateway performs a variety of tasks to process the
transaction:
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• Buyer selects the product, clicks on BUY Button initiating the payment from the
merchant's website where user info is collected
• This info is sent to the payment gateway / payment aggregator
• Payment aggregator collects card info in a secure server and passes this through its
Acquiring Bank (Payment aggregator's bank) to the Card networks like VISA,
MasterCard
• The Card Network checks with the Issuing bank (Customer Bank) whether the
transaction can be authenticated or not.

10. POS Transaction
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11. Debit/Credit Card Transaction
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12. If everything is correct here, consumer a/c or card is debited by the
Issuing bank:
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• Issuer bank sends confirmation to the card network
• This is further notified to the acquiring bank and then to the payment aggregator
• Payment aggregator now send a confirmation to the Merchant, who further informs
the consumer
• The consumer also gets notified by his bank (issuing bank) about the transaction

13. Thank You!
ME@SHASHIDHARKUMAR.COM
SHASHIDHARKUMAR.IN