Many businesses rely on various methods to collect the funds from credit card and debit purchases. One of the most critical parts of the collection process is the credit card payment gateway. This is an e-commerce application that authorizes credit card and debit payments. The gateway transfers information between a payment portal, such as a website or mobile device, and the bank holding the funds. So what is involved in the transaction process?
Typical Processes
At the beginning of the process on a website, the customer completes their order and submits their credit card information. Their payment information is then encrypted and sent to the merchant’s server. One of the ways this is accomplished is through a Secure Socket Layer or SSL.
The information is then transferred to the credit card payment gateway, who forwards the information to the payment processor associated with the merchant’s bank. The processor then sends a request to the card association, who declines or authorizes the transaction. Finally, the information is routed to the issuing bank for payment.
Once Goods or Services Ship
After the authorization takes place, the merchant will release the goods or services to the customer. Then their system notifies their bank to settle with all the issuing banks. The money is collected from these banks and deposited back into the merchant’s account.
Fees may be collected at this time from the gateway processor and the merchant’s acquiring bank. The entire process from the time the goods or services are released until the funds are available to the merchant is typically no more than 3 days.
Fraud Services
In addition to providing a middleman for various transactions, credit card payment gateways can provide tools to screen for fraud, as well as calculate tax amounts in real time. This means that the request to the processor will include the full amount of the transaction versus just the pre-tax amount.
Online gateway services can also provide an international component for websites that cater to a larger customer base. Finally, it is important to note that most of these processes happen in just a few seconds but they authorize the movement of goods and service around the world.
Merchants Bancard provides credit card payment gateway processing services, as well as necessary credit card processing equipment for a variety of business types. They also advice businesses on services and software options.
