What Is a Payment Gateway? How it Works in an eCommerce Site?

An online store owner understands the importance of payment gateways. It is a cutting-edge technology used by e-merchants to accept payments in the form of debit or credit card from online customers. In eCommerce websites, payment gateways are the “checkout” pages used to enter debit or credit card details to make the payment safely, securely and instantly. If you are new in the industry, have a look at this guide and understand everything about payment gateways. Let’s Get Started!

What Does eCommerce Payment Gateway Mean?

A payment gateway enables the transfer of money between customers and e-merchants. It allows your online store to request money from the bank of a customer for products they have purchased. After the approval, the payment is securely transferred to the seller’s bank. Isn’t it simple and authentic! When establishing a payment gateway on your website, make sure you make right decisions on time. The foremost thing is to setting up a safe, secure and trusted payment process for your potential customers. So, here is a comprehensive guide to understand how it works:

The merchant’s website sends encrypted payment details to payment gateway at the time of checkout.

When a customer lands on your website via laptop or phone, you provide them a user-friendly navigation for online shopping.
They add the selected items to their shopping cart and then proceeds to checkout.
In this step, they may be asked to confirm the order and fill in their billing information
Customers submit the order and click on “pay now”
The web browser of customers encrypts the payment information and later sent it to your web server. This is carried out through the Secure Socket Layer (SSL) encryption. Make sure you have a full SSL certificate for online financial transaction
Later, the gateway app on your site forwards the transaction details to your payment gateway.
The whole process will now be handled by payment gateway.

Payment Gateway Takes Authorisation by Sending Request to Customer’s Bank

The payment gateway will send the encrypted transaction details to the payment processor.
The processor then forward the details to the customer’s card company, i.e Visa or MasterCard
The card association takes the transaction to the bank connected to the card.
The customer’s bank receives the request and sends a code on the customer’s registered phone number for the confirmation.
The response is sent from the payment processor to the payment gateway
The payment gateway takes this response to your site and passes it on both ends.

The Payment is Processed After Approval

If the customer approves the transaction, you send the authorization through the payment processor to your bank.
Your bank deposits all the money either into the merchant account or the aggregated merchant account.
The payment is made into your business bank account.

Wrapping up

The process is quite simple and hardly takes 5-6 minutes to complete the entire process. However, it is good to create a responsive, user-friendly and secure online store with the help of the best eCommerce Development Company in Melbourne.