Payment Gateway refers to an e-Commerce service that
authorizes payments for e-businesses & online retailers.
In a way, it represents a physical POS (Point-of-sale)
terminal located at most retail outlets.
Merchants acquiring bank then forwards the transaction
information to the issuing bank.
Card issuing bank
sends a response back to the Payment Gateway.
The response includes information that whether
the payment has been approved or declined. In
case of declination the reason is also sent in
the response.
The response is
forwarded by the Payment Gateway to the
merchant's server.
At merchants
server the response is encrypted again and is
relayed back to the customer.
The whole process
takes less than 5 seconds. At the end of the
bank day the acquiring bank (or card issuing
bank) deposits the total of the approved funds
in to the merchant's nominated account.
User Placing an order
Merchant's Web
Server
Payment Gateway
Bank
