A
payment gateway is an online system for processing credit card or other payment transactions in real-time. In order to have a payment gateway installed on your gateway, you need a merchant account from a recognized bank or a financial institution. The payment gateway facilitates the coordination of communicating a payment transaction between the various backend payment networks or banks. The payment gateway captures the credit card transaction, encrypts the transaction information, routes it to the credit card processor and then returns either an approval or a decline notice.
This is a seamless process and your customer does not directly interact with the payment gateway as data is forwarded to the gateway via your shopping cart and a secure connection.
A
payment gateway usually provides additional features such as online virtual terminal for manually processing transactions, transaction reports, etc. It allows a merchant to accept credit card and other forms of electronic payment.
Payment gateways have become a necessity for online merchants who accept credit card payment from their customers or clients.
There are other benefits that are provided by
payment gateways such as credit card validation and processing in real time, automatic deposition of money into your bank account, reports and refunds normally allowed via browser by the
payment gateway company.
There are currently three types of gateway interfaces. They are:
- COM based gateway interface
- Form based gateway interface
- XML transport gateway interface
