What’s the Payment Gateway in 2022?
In 2022, a payment gateway is a technology that facilitates the transfer of payment information directly from the merchant to the bank or financial institution processing the payment.
Businesses and consumer merchants use the payment gateway to facilitate payments online. Merchants do not need to be experts in payment gateways, but they should understand how payments flow from their customers to their personal bank accounts.
Using the insights and trends from the payment process journey, you can learn how to select the right payment gateway service in 2022 and beyond for your business.
Online Payments: Who’s Who
The online payment gateway definition begins by identifying the key terms involved in the payment process when a customer clicks the “Pay” button.
Merchants operate in any vertical (eCommerce, Manufacturing, Utility, Education, Labs Diagnostics, Insurance, Market Place, etc.) and provide a product or service to customers.
The customer refers to the person who wants to purchase goods and services the merchant offers and initiates the purchase transaction.
An issuing bank issues the cardholder’s credit and debit cards for the card schemes they choose to use. (Example: Rupay, Master Card, Visa, American Express, HDFC Bank, SBI Bank, ICICI Bank, Axia Bank, etc.)
To receive payment, the acquiring bank transmits the merchant’s transaction to the issuing bank, also known as the issuing bank. also called the purchasing bank, the acquiring bank, or the merchant’s bank account.
What is the distinction between a payment gateway and a payment processor?
In a payment gateway, customer data is transferred to the acquirer, and then the acceptor and decliner information is sent back to the customer. Gateways provide security, ensure that funds are available, and ultimately facilitate the payment of merchants. They act as a bridge between a merchant’s website and its acquirer. This enables the secure transmission of credit card information from the merchant to its acquirer.
By using an online payment gateway, merchants can ensure transactions are completed safely and promptly. The payment gateway acts as a middleman between the customer and the merchant. Gateways provide a platform for merchants and acquirers to manage sensitive card information.
Payment Gateways in 2022: What’s the Need?
In some ways, you may find it odd to need a payment gateway if it is only a middleman. Let us first point out that online payments do not take place with physical cards. That is, you cannot swipe the customer’s card at a POS terminal. The information a customer enters on the payment page is the only one you can trust, unlike when you pay in brick-and-mortar. The use of a payment gateway helps reduce fraud risk associated with card-not-present transactions.
Fraudsters could further exploit your business’s data if the online payment process removes the payment gateway. This could lead to fraud and chargebacks. In addition to initiating illegal transactions, fraudsters may also use other methods to harm your brand’s image and expose you to further fraud.
Easebuzz Payment Gateway acts as stewards of your customer’s payment data. Online merchants use payment gateways to relay information between you, the merchant, and the bank offering the payment. Encrypting a merchant’s sensitive card information helps protect it from unauthorised hackers, expired cards, insufficient funds, and exceeding credit limits.
How’s Easebuzz Payment Gateway system work?
Now let’s explore how an Easebuzz payment works from start to finish.
- A customer selects the product/service they wish to purchase, then proceeds to the payment page. Payment gateways provide many options for your payment page, with Easebuzz payment gateway offering a wide variety of options.
- Hosting Payment Pages: Hosted payment pages let customers send credit card data to the payment gateway and then to the acquirer. The payment gateways receive the data securely before passing it on. Since hosted payment pages store no cardholder data, online merchants are relieved of the PCI compliance burden.
- The integration of two servers, or direct integration, is called server-to-server integration. Direct transactions can be initiated by asking the payment page for credit card information. By not redirecting customers to the payment gateway’s payment page, customers can complete card payments directly from their browser.
- This means quicker checkouts, a consistent user experience, and greater control over the appearance of a merchant’s payment page. Using a server-to-server connection is the best option if you handle payment data before it is forwarded to the payment gateway.
- An important feature of client-side encryption is the encryption of sensitive data on the client’s device before it is sent to the merchant’s server. Client-side encryption is also known as encryption at-source. By using an encryption library provided by the Easebuzz payment gateway, you are able to encrypt card data on your website to comply with PCI compliance.
Process to be continued –
Customer details must be entered on the payment page, including cardholder name, expiration date, and CVV number. The Easebuzz payment gateway securely transmits this information depending on how you integrate it (hosted payment page, server-to-server integration, or client-side encryption).
- Before sending card details to the acquiring bank, the payment gateway validates and encrypts them.
- By securely transmitting information to the card schemes (RuPay, Master Card, Visa, American Express, HDFC Bank, SBI Bank, ICICI Bank, Axis Bank, etc.), the acquiring bank is capable of protecting the cardholder’s data.
- Upon receiving payment data from the card schemes, the issuing banks perform fraud screening; after performing such screening, the issuing bank authorises the transaction.
- The card scheme transmits a declined or approved payment message to the acquirer.
- If the payment is approved by the issuing bank, the acquiring bank will collect the funds from your merchant’s account once the acceptance or denial message is sent to them.
- Settlement occurs when the funds are deposited into the merchant’s account. Payments are deposited according to the agreement a merchant makes with his payment gateway.
- According to the message, the merchant can either display a page with payment confirmation, or offer another method of payment.
Despite the fact that most of the payment gateways activity takes place in the background of each transaction, it is still beneficial for both merchants and customers. These steps can be completed in nanoseconds or even within two seconds.
What do we understand as a merchant account?
- Making payments online and using cards requires a merchant account. This is not the same as a business account. A merchant account can be offered by a payment gateway, a payment service provider (PSP), an acquirer, a payment processor (PS), a high street bank, or an independent sales organization. The merchant identification (MID) number will be assigned to your merchant account after your application is approved for a merchant account. Following authorization of payments by your acquirer, the MID is used to process credit card transactions and transfer funds from customers issuing banks to your bank account.
- Customers transfer money to the payment gateway. Why isn’t the money directly transferred from the issuing bank to your business bank account? You need a merchant account to ensure that your chain of approval holds from the time a consumer submits their card details until you receive payment.
- Your transactions may be subject to returns, depending on your industry and business nature. As an online seller, you can return merchandise, but you may have to pay back some of the money you received. As soon as the returns have been deducted from the merchant account, the remaining funds are transferred to your bank account.
- The merchant account is easier to get paid from. The Easebuzz payment gateway collects deposits from multiple sources and combines them into one deposit for your bank account. This makes reconciliation easier.
- If you are both an online merchant and a brick-and-mortar merchant, you will need two merchant accounts. Payment reconciliation is done by comparing your bank statements with your accounting records, your payment gateway, or your PSP’s records.
The Difference Between Payment Gateways and Merchant Accounts
A merchant account is necessary to accept card payments and to transfer online payment data. Online payments can only be processed through a payment gateway, your PSP, or any other financial institution that processes payments.
How do I set up an Easebuzz payment gateway?
- Step 1: Create a free account to begin receiving payments online.
- Step 2: Verify your email address.
- Step 3: Submit your eKYC documents.
- Step 4 = Immediately go live and begin accepting payments online.
How do you choose the right payment gateway for your business?
There is one-stop shopping with Easebuzz, a provider of payment solutions. Payment gateways and merchant accounts may seem complicated, but they are not. We integrate shopping carts, fraud screening, payment gateways, acquiring and popular alternative payment methods.
The Easebuzz payment platform was designed with the customer experience in mind so that you can find all the information you need about India’s best payment gateway. That’s why Easebuzz keeps the customer in the mind before providing services for them.