How does a Payment Gateway process a transaction?

 

How does a Payment Gateway process a transaction?



How-does-a-Payment-Gateway-process-a-transaction

The merchant initiates a transaction by filling in the customer’s required details on the payment page – such as the cardholder’s name, card number, card expiration date, and the Card Verification Value (CVV) code. The gateway encrypts the customer’s details and performs the required security checks. Payment processors redirect the request to the issuer bank (customer’s bank). The issuer bank validates the customer data and decides whether to approve or decline the transaction. The information is sent back to the payment processor to the gateway and back to the customer to confirm the payment. The issuing bank releases the funds to the acquiring bank, and the acquiring bank transfers the funds to the respective merchant account, completing the settlement process. These processes might seem overwhelming, but these transactions happen within 30 seconds. The payment is transferred to the merchant account within 48 hours.

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