One of the main tools used to perform business today is something called a payment gateway. A payment gateway is a kind of electronic interface used to facilitate commerce. While payment gateways can differ, they usually all include a way to quickly transfer information between customers, retailers and banks to allow a customer to purchase some kind of product.
The most common example of a payment gateway is an online checkout that allows customers to make purchases with credit or debit cards. However, there are other options. For example, the home shopping channels on cable TV allow customers to make payments via phone calls. Certain companies provide payment gateways to businesses and entrepreneurs as a service. What fees are charged to retailers and how much is passed on to customers really depends on the policies of the specific companies involved.
Overall, the concept is that a payment gateway should act pretty much the same as the credit and debit card payment terminal that exists in most retail stores. If a customer submits the information for a credit card, that information is then sent in an encrypted form through the gateway. This information is sent through the network to the bank associated with that payment option. The information related to that credit or debit card is then verified by the bank. If the information is correct and there are enough funds to cover the payment, it is then sent back to the merchant for a final approval.
The information that is sent through the system is stored at least temporarily by the merchant. This allows that merchant to send all the various payments in a single batch to that merchant’s bank account to collect the revenue.
There are many benefits to using payment gateways. Above all else is the fact it is a relatively safe way to process payments from credit and debit cards thanks to the security provided by the encryption. However, the added security is passed on to merchants as well. The system is set up to stop purchases from being made with cards that are stolen, have closed accounts or do not have adequate funds. It removes a lot of the guess work and makes selling products online a far less risky proposition.
The use of payment gateways to make a credit or debit purchase also gives the customer the ability to dispute transactions if something goes wrong. There is of course an electronic trail left behind that one can follow. This is not the case with cash, check or money order purchases.
Author Bio:-
The author of this article has immense knowledge about the innovative payment processing solutions. Her article on card payment solutions has earned her enviable reputation in the eyes of people.
The most common example of a payment gateway is an online checkout that allows customers to make purchases with credit or debit cards. However, there are other options. For example, the home shopping channels on cable TV allow customers to make payments via phone calls. Certain companies provide payment gateways to businesses and entrepreneurs as a service. What fees are charged to retailers and how much is passed on to customers really depends on the policies of the specific companies involved.
Overall, the concept is that a payment gateway should act pretty much the same as the credit and debit card payment terminal that exists in most retail stores. If a customer submits the information for a credit card, that information is then sent in an encrypted form through the gateway. This information is sent through the network to the bank associated with that payment option. The information related to that credit or debit card is then verified by the bank. If the information is correct and there are enough funds to cover the payment, it is then sent back to the merchant for a final approval.
The information that is sent through the system is stored at least temporarily by the merchant. This allows that merchant to send all the various payments in a single batch to that merchant’s bank account to collect the revenue.
There are many benefits to using payment gateways. Above all else is the fact it is a relatively safe way to process payments from credit and debit cards thanks to the security provided by the encryption. However, the added security is passed on to merchants as well. The system is set up to stop purchases from being made with cards that are stolen, have closed accounts or do not have adequate funds. It removes a lot of the guess work and makes selling products online a far less risky proposition.
The use of payment gateways to make a credit or debit purchase also gives the customer the ability to dispute transactions if something goes wrong. There is of course an electronic trail left behind that one can follow. This is not the case with cash, check or money order purchases.
Author Bio:-
The author of this article has immense knowledge about the innovative payment processing solutions. Her article on card payment solutions has earned her enviable reputation in the eyes of people.
VPS- How Do Payment Gateways Work?
Reviewed by I
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May 19, 2020
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Reviewed by I
on
May 19, 2020
Rating: