Let us understand first what is a payment gateway –
Today with most businesses doing online work instead of offline digital payment is becoming a necessity. Earlier, people used to go to a Kirana store, meaning a grocery store get their goods, pay cash and take the items. Current pandemic conditions have brought in a lot of change in our lives, and the shopping experience has only become better because you don’t have to stand in lines or haggle over a price. Convenient shopping apps where you just use your fingers to select your product, and add it to your cart without lifting any heavyweight and pay for it on your debit or credit card for the items to be delivered to your home, right at your doorstep without you having to pay for petrol or going out in the sun. So, the question is, when you make the payment on the shopping app or website how does that site access your bank account or credit card to take the money?
When the debit or credit card details are collected by the shopping app or website and this data passes through an intermediary like a payment gateway where the information is segregated and depending on the card type Visa, MasterCard or Rupay the data is sent to the respecting issuing financial institution. The financial institution will do its check and may approve or reject the transaction. When the transaction gets approved, the payment goes into the merchant’s account. This entire process just takes place in a fraction of a second.
Secondly, why it is essential – There are many different credit and debit card providers and so many banks. A payment gateway makes the transacting between all such entities easier and efficient. The merchant can accept money from many different cards and the customer is happy about the convenience that they can pay however they want.
Thirdly, how a payment gateway is the safest and professional way of doing financial transactions for business –. All the customer’s information relating to his card details are encrypted that is, the data is stored in a coded fashion making it difficult for fraudsters to access the information. Because it performs a quick fraud scan. Hence from a customer’s point of view the data is secured, and he has the convenience of paying from whichever bank account he wants without carrying the cash on him.
From a merchant’s perspective, a payment gateway not only handles the customer’s data in a secured way but also acts as a cashless register for the merchant. Where all the digital payments are registered on the gateway. The transaction which is authorized and pending, paid or cancelled are all in one place, which makes it easier for cash reconciliation.
A payment gateway is much more helpful for a merchant when the benefits of credit, debits and all other cash flow expenses and earnings can be seen in one place.
