Nowadays, it’s becoming easy to open up a store online that goes global thanks to a website, eCommerce Platform or internet payment processing service solutions. But for most internet business, accepting payment online is the most significant challenge which requires a complicated Fintech Solution and technique. To understand what your business needs, we’ll mainly talk about what is internet payment gateway and how does internet payment processing work in this article, so that you can get some ideas when dealing with online payments service.
What is an Internet Payment Gateway?
An internet payment gateway is the most important part of any online business. What an internet payment gateway enables is a way for your site to process credit and debit card payments. One is a gateway which processes the credit card numbers and the second method is an internet payment gateway which collects the numbers and necessary information with you needing to run the numbers yourself on an offline credit card machine. Many companies, banks and websites offer this service online.
How does Internet payment processing work?
There are three components of any web payment processing platform:
Merchant account: this is a bank account that enables online payment processing for internet businesses. You can receive a merchant account via a payment processing company, an independent contractor, or a large bank. Without it, you would have nowhere to keep the money your customers pay you.
Payment processor: a payment processing company or financial institution handles the transactions between your customers’ banks and your bank. They deal with such questions as credit card validity, available funds, card limits, and so on. One more essential function of the payment processor is security. It’s the responsibility of a payment processor to check whether card information is correct and to protect you from fraudulent activities. They also take care of various errors, accidental transactions, and incorrect charges.
Payment gateway: this is like an online point of sale. A payment gateway is a mediator between all transactions on your website and the payment processor. It connects your merchant account with credit and debit card issuers like Mastercard and Visa. You need a payment gateway because security measures forbid transferring data directly from bank to bank. So a payment gateway is essential for an internet payment processing system.
The entities involved in online card processing services are the customer, the business, the payment processor, the payment gateway, the customer’s bank, and the business’s bank. Some web payment processing service providers offer all three components, namely merchant account, payment processor, and payment gateway in one platform. Others combine a merchant account and payment gateway with a third-party payment processor.
Here’s how internet payment processing works:
The customer picks up an item and pulls out their card
The merchant submits a transaction
The payment gateway securely sends the transaction to the processor
The processor verifies and approves the transaction
The customer’s bank sends money to the processor
The processor sends money to the merchant’s bank
The processor sends the status of the transaction to the gateway – either approved or denied
The merchant receives the message of approval or denial
The merchant receives the money for the sold item
Internet Payment Gateway Service Provider – Oceanpayment
Are you looking for an internet payment gateway service provider that dealing with internet payment processing? Oceanpayment has focused on the global payment industry since 2014 and provides customers with professional and easy-to-integrate payment solution for online E-Commerce business. Contact us to get more details >>>