Did you know that 80% of the overall number of internet users make their purchases online?
On a global scale, it is so interesting how e-commerce briskly changed the game in the retail industry.
What is the secret behind how purchases have been made easier by e-commerce?
The answer is PAYMENT GATEWAY.
Does it sound unfamiliar?
Payment Gateway is an e-commerce software that authorizes online merchants and buyers by seamlessly connecting to an in-house payment processor via credit cards or an online banking system.
This system operates on a high level of security by encrypting all the information between the cardholders, the merchant, and the bank.
Understanding the process involved in payment gateway can be intimidating or confusing at first glance. Below is a simple yet informative list that will help you learn about how Payment Gateway works.
Let’s get started!
Payment Gateway: Step-by-Step Guide
1. Customers place their order on the website or phone application by hitting the “Buy Now” or call to action button present on the platform. Some e-commerce websites require customers to input their card details on the field provided or confirm it through an automatic phone answering machine.
2. Merchants will now transfer the customer’s order details to the payment gateway. Customers can now proceed to complete the necessary payment transactions with their preferred payment methods. The usual payment options that customers can choose from include credit/debit card, domestic banking, or cash. Once the customer chooses a payment option that suits them best, the payment is sent to the issuing bank for transaction authentication.
3. During transaction authentication, the bank may accept or decline the payment based on the remaining balance in the customer’s account. If the customer has an outstanding and unsettled balance or has insufficient credits left in their account, then the bank rejects the payment and the transaction is discontinued.
4. When the transaction is verified and approved by the bank, the merchant then receives a message, indicating or confirming that the transfer of payment was successful.
5. The last step that completes the payment gateway process is the settlement of the amount paid. Settlement of the money used to pay for goods or services acquired through e-commerce website goes as follows: (1) Bank to the Payment Gateway, then (2) Payment Gateway to Merchant. Once the payment successfully reaches the merchant, the order is ready for delivery.
Payment Gateway plays an important role in e-commerce. It enables a seamless method of making purchases online either by card, online banking or even cash. Using a Payment Gateway contributes to the success of making every online transaction hassle-free for both merchants and customers.