In eCommerce, having a functional payment gateway is very important. Since transactions are handled remotely through a network, customers need to be protected to the fullest extent. Payment gateways are your primary method of accomplishing this.
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Merchant Account - Merchant services is the name given in the United States to a broad category of financial services intended for use by businesses. In its most specific use, it usually refers to the service that enables a business to accept a transaction payment by use of the customer's credit or debit card.
Payment Gateway - A payment gateway is an e-commerce application service provider service that authorizes payments for e-businesses, online retailers, bricks and clicks, or traditional brick and mortar. It is the equivalent of a physical point of sale terminal located in most retail outlets. Payment gateways protect credit card details by encrypting sensitive information, such as credit card numbers, to ensure that information is passed securely between the customer and the merchant and also between merchant and the payment processor.
How it Works
- A customer places an order through your eCommerce website
- The web browser encrypts the information being sent to the merchant server
- This encrypted information is then forwarded to the merchant's payment gateway. This connection is encrypted as well
- The payment gateway forwards the information to the merchant's bank payment processor
- The payment processor sends the transaction information to the appropriate card association (Visa, MasterCard, etc.) to be approved
- Processor forwards the authorization to payment gateway, which then forwards it to the site being ordered from. This entire process typically takes 2-3 seconds