E-commerce depends on some services to enable people transaction business without problems one of such services is payment gateway. A payment gateway provides merchants and other parties in an online business transaction the payment method (credit card, debit, and other payment systems) authorization to conduct business smoothly.
A payment gateway can be a bank or a standalone payment service provider that facilitate payment transactions among people shopping at different times. Part of the services rendered by a payment gateway is the sharing of financial information between a payment portal and the processing or acquiring financial institution.
Description of how a payment gateway works
If Mr. A goes to a store to buy products worth $500, he needs to make payment to the merchant for the transaction. The only way a merchant wants to deal with Mr. A is because the payment gateway has Mr. A’s bank detail. If it’s time to pay for the products bought, it is the payment gateway that will provide information on Mr. A financial readiness to pay. The payment gateway can connect with Mr. A’s bank to acquire information about his bank account information to determine if he has enough funds to pay for the products bought.
The information obtained by the payment gateway will be furnished to the merchant bank, and a significant monetary transaction will take place while the payment gateway obtains and keep the financial transaction for the respective parties in the transaction.
Features of a payment gateway
- It is a financial technology application. A payment gateway is comprised of hi-tech hardware and software that handle financial transactions for some parties including merchant found at various stores across the e-commerce infrastructure globally. It also includes the acquiring banks and issuing banks. The payment gateway server connects this network of people in a business transaction and served by the software to provide timely financial and monetary information to all parties needing information at different times.
- It is financial security application. E-commerce will not be possible without a way of sharing financial and monetary information between transacting parties in business. In sharing the information, there is the need for hi-level security protocol to protect everyone’s account information from falling into the wrong hands. To this end, a payment gateway is compliant in all matters of security such as PCI DSS and other information security protocol. It is also complaint in HTTPS for its internet connections.
- Provide real-time transactions. A payment gateway cannot fail to provide immediate information for sale purposes. When customers want to pay for products or services bought, the merchant and other parties need real-time information to process the transaction and payment gateway is ever ready to make it available at the right time.
A payment gateway service is not free; people who use its service are charged service fees to keep the service going without interruption.
— CairoCorps (@CairoCorps) 10 de febrero de 2017