The credit card issuing bank receives the authorization request, verifies the credit or debit available and then sends a response back to the processor (via the same process as the request for authorization) with a response code (I.e.:: approved, denied).Otherwise, the card association routes the transaction to the correct card issuing bank. If an American Express or Discover Card was used, then the card association also acts as the issuing bank and directly provides a response of approved or declined to the payment gateway. The payment processor forwards the transaction information to the card association (I.e.: Visa/MasterCard/American Express).The payment gateway converts the message from XML to ISO 8583 or a variant message format (format understood by EFT Switches) and then forwards the transaction information to the payment processor used by the merchant's acquiring bank.This is another ( SSL) encrypted connection to the payment server hosted by the payment gateway. The merchant then forwards the transaction details to their payment gateway.This reduces the merchant's Payment Card Industry Data Security Standard (PCI DSS) compliance obligations without redirecting the customer away from the website. The payment gateway may allow transaction data to be sent directly from the customer's browser to the gateway, bypassing the merchant's systems. In between other methods, this may be done via SSL (Secure Socket Layer) encryption. If the order is via a website, the customer's web browser encrypts the information to be sent between the browser and the merchant's webserver.A customer places an order on website by pressing the 'Submit Order' or equivalent button, or perhaps enters their card details using an automatic phone answering service.When a customer orders a product from a payment gateway-enabled merchant, the payment gateway performs a variety of tasks to process the transaction. A payment gateway often connects severalĪcquiring banks and payment methods under one system. The gateway is not directly involved in the money flow typically it is a web server to which a merchant's website or POS system is connected. Payment gateways are a service that helps merchants initiate ecommerce, in-app, and point of sale payments for a broad variety of payment methods. The payment gateway may be provided by a bank to its customers, but can be provided by a specialised financial service provider as a separate service, such as a payment service provider.Ī payment gateway facilitates a payment transaction by the transfer of information between a payment portal (such as a website, mobile phone or interactive voice response service) and the front end processor or acquiring bank. Merchant service that authorizes paymentsĪ payment gateway is a merchant service provided by an e-commerce application service provider that authorizes credit card or direct payments processing for e-businesses, online retailers, bricks and clicks, or traditional brick and mortar.
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