Home >> Topic >> What is a payment gateway? How does a payment gateway work?

What is a payment gateway? How does a payment gateway work?


As an e-commerce owner, you know the importance of providing a good user interface and functionality in your website or app, but what if the payment experience is not good? In the end, customers no longer trust us, sales and customers Engagement will drop. Payment gateways play an important role in the customer buying experience, and a good payment gateway should be smooth, fast, safe and reliable.

The best payment gateways guarantee the security and confidentiality of customers, leaving a good impression and credibility on the e-commerce website or application. A functional payment gateway should allow businesses to securely accept various transaction facilities (debit cards, credit cards, wallets, etc.) on websites and mobile applications.

The payment gateway for the e-commerce store should be set up in the correct way. Without the right functionality, your business could experience cart abandonment due to payment gateways, resulting in lost customers and sales. The key to ensuring the long-term success of your online e-commerce store is setting up a functional payment gateway company for multiple forms of payment options (debit card, credit card, wallet, etc.), as well as trusted security certificates and symbols.

How does a payment gateway work?

Add the product or service they want to purchase to their cart and proceed to the payment page.

The customer is then asked to provide credit or debit card details. These details include the 16-digit card number, cardholder name, expiry date and CVV number.

After submission, the information is securely transmitted to your payment gateway, i.e. server-to-server, payment page integration or client-side encryption.

The payment gateway then encrypts the card details and performs a security check before sending the card's information to the receiving bank.

Acquiring bank securely sends information to card programs i.e. Visa, Mastercard, Maestro, etc.

The card program ensures another layer of security checks before sending payment information to the issuing bank. The issuing bank will authorize the transaction after a security fraud check. Approved or rejected information will be returned from the card program to the bank and sent to the receiving agency.

The receiving bank will approve or deny sending the information to the payment gateway and then send the information to the merchant. If the payment is successful, the receiving bank will collect the payment amount from the issuing bank and deposit the funds into the merchant account. Depending on the payment gateway, the merchant can display an order or payment confirmation page, or ask the customer to try again in another way. The best payment gateways offer smooth transactions that happen in the background in real time, and the entire process takes less than three seconds.