What is a payment gateway?
A payment gateway is an Ecommerce application that authorizes secure credit card payments online. Without a payment gateway, online consumers would not have the means to purchase goods and services over the Internet. Payment gateways are vital to online business.
The process of connecting a website to a bank can be rather complicated. Usually, rather than doing it themselves, an online merchant will buy the service from another company such as authorize.net. Security is vital in a payment gateway because the consumer will have to list some personal information such as their credit card number, name, address, and more. Very often, a unique code word is used for each transaction to act as a kind of signature.
A payment gateway works by establishing a connection between a merchant eCommerce site and a payment gateway site. When a transaction is made, the payment gateway site sends the information to the merchant’s bank processor. The bank processor sends the information to the credit card network. From here, the process continues like a normal credit card payment, except that the data results are sent back to the merchant’s site as well. The final transaction is when the credit card bureau sends the appropriate amount of money to the online merchant account. This whole process is relatively quick and is similar to the process of charging with a credit card. The only real difference is that the data must be sent securely to an online merchant and a payment gateway website.
Payment gateways are a necessary part of online business transactions. Without them, online business would not exist. Because we have payment gateways, more goods and services are available to the public than ever before.
