29 Jan What is a Payment Gateway?
E-commerce, or the ability to shop and/or process payments online, is becoming more and more important to merchants worldwide – whether running an online or traditional, brick-and-mortar, operation.
With so much emphasis on using the internet to process transactions, a safe and secure means of processing payment transactions is vital.
A payment gateway is the general term used to refer to the credit card processing service used to provide for the secure and timely processing of financial transactions.
The payment gateway is a means to help protect sensitive personal financial information from fraud or theft. With the payment gateway, secure data is encrypted to help ensure the secure transmission of data across the network.
Basically, where a traditional brick-and-mortar establishment uses a point of sale (POS) terminal to securely manage financial transactions, the e-commerce establishment utilizes a payment gateway.
The Basic Process
Once a customer clicks the “submit order” button, data is encrypted and sent to the merchant’s website. This information is then routed on, via what is called an SSL gateway (another encryption security feature) to the payment gateway, which will then forward the information on to the merchant’s bank’s payment processor.
Depending on the type of payment used (such as Visa, Mastercard, etc.), the payment processor contacts the card issuer’s bank to see whether the transaction can be approved or declined. This information is then routed back to the processor and merchant. After this final communications take place which entail the actual transmissions of funds from the issuer’s bank to the merchant’s bank. The process doesn’t generally take longer than 72-hours – amazingly fast given all that is entailed in the process.
With so many merchants relying on e-commerce solutions to process financial transactions, payment gateways are more important than ever before. A payment gateway helps increase the transmission security of sensitive financial data through the use of sophisticated encryption. This helps to ensure that every financial transaction – whether in a traditional brick-and-mortar store or an online retailer – is safe, secure, and convenient. Utilizing the latest in security and encryption software, a secure payment gateway is a must-have for today’s businesses.