Steps involved in Credit Card Processing

A payment gateway is a secure online service that submits payment card transactions to the merchant bank’s card processing network. If you’re running an e-commerce business, it is must to have a payment gateway. The payment gateway checks the information received from the store, collects credit card information from the customer, if necessary and determines what company manages that credit card to transmit an authorization request for the card to be charged.

The gateway also redirects back to a specified program at the store website with authorization approval or failure and perhaps other data related to the sale. A payment success or failure program is needed for the e-commerce website to receive the redirection. The main function of the gateway is to complete the communication of both parts and protects the internal network security of the bank. It can guarantee information be transferred securely and seamlessly.

The processing of a payment card transaction at an e-business website involves the following steps:

1. The customer or consumer enters and submits payment information at the website.
2. The website or e-business transmits the payment information to the payment gateway.
3. The payment processor connects to the merchant bank’s card processing network to route the transaction to the card issuer.
4. The card processing approves or declines the payment transaction, sends back a notification, and, if the transaction is approved, transfers fund to the merchant account.
5. The payment gateway notifies the website and customer for the results of the transaction.

Above are the steps that are followed when a customer click on the checkout button.

Posted in: Credit Card Processing