Friday, 23 February 2018

Importance of Payment Gateway

A payment gateway can be defined as a tool that is used to manage payments and is often used with various ecommerce websites and portals. It helps to process debit and credit card payments that are often carried out in online as well as conventional brick and mortar shops. The payment gateways help to perform these transactions by communicating key information between the payment portals like websites or web-enabled mobile devices and banks or front end processors. The payment gateways play a very important role in managing ecommerce transaction processes, effectively authorizing the payments between the merchants and the customers. Popular payment gateways include PayTM, PayPal, FreeCharge and MobiKwik.

The main role of a payment gateway is to authorize transfer of monetary fund between the buyers and the sellers. There are a number of critical functions that are performed by payment gateways in order to ensure safe and secure transactions for their users. Let’s have a look at some of them.

One of the most important features of payments gateways is of course encryption. It is this feature that mainly deals with the safety and security of information handled through the payments gateways. The web browser effectively encrypts all the data that is to be transferred from the web server of the sender to that of the vendor. The payment gateway sends all the transaction details and data to payment processor that is utilized by the acquiring bank on the vendor's side.

·      When a credit or debit card is used for issuing a payment, it has to send through an authorization request that has to be either approved or denied by the server of the bank. All sensitive card information is carefully handled by the payment processor which they send such transactional data to the card association. It is then upon the bank to accept or reject such a transactional authorization request.

Once the authorization request has been sent and a response to that has been generated, the processor sends an authorization to the consumer and merchant to the specific payment gateway. After such a response has been generated by the gateway, it is transmitted to the interface or website so that the payment can be processed. The whole process is actually handled within a matter of a few seconds.

There are also a number of payment gateway functions that are meant to filter out frauds and enhance the security of the whole process. Some of these functions are listed below:
  • ·         AVS checks
  • ·         Geolocation
  • ·         Delivery address verification
  • ·         Identity morphing detection
  • ·         Velocity pattern analysis
  • ·         Computer finger print scanning methods and technology
With the growing trends of ecommerce, it is now a necessity for online stores to provide secured and efficient payment gateway for their customers so that they can carry out their financial transactions effortlessly. Implementing the best quality payment gateways can help an online business firm to increase the number of online transactions, which in turn can boost the sales and market profits.