1. How Does Payment Gateway Integration Works
Payment gateway integration is a must for every eCommerce portal or an online
store. Payment gateway is the secure and safe online link that helps monetary
transaction between merchant and the acquiring bank.
A payment gateway system performs a set of tasks to carry a defined transaction between a
payment medium (which may be a website, mobile phone, etc.) and the front end bank or
processor. On the internet, whenever the customer orders a product or a service from a
merchant's payment gateway, a series of tasks is carried out by the payment gateway in order
to process the preferred transaction.
Check How the Process Work

2. » First of all customer places an order from a web portal
» If the order is through a website, the customer's web browser encrypts the information to
be sent between the browser and the merchant's bank server. This is perfectly carried out
through SSL encryption.
» Later the merchant forwards this transaction details to payment gateway. This is one more
SSL encrypted connection
» Merchant forwards transaction details to their
payment gateway. This is another connection secured
by SSL to the payment server hosted by the payment
gateway system.
» Once the payment gateway get the transaction
information, it forwards it to the payment processor
used by the merchant's acquiring bank.
» Further, the payment processor system forwards the
transaction information to the card association
(Visa/MasterCard etc)
» Then, the card association forwards the transaction
to the right card issuing bank.
» When the bank receives the authorization request, it carries out fraud and credit or debit
checks and then sends back the response to the payment processor system including a
response code.
» This response code defines the reason for the transaction failure giving the appropriate
quotes according to the situations.
» In the meantime, the credit card issuer holds an authorisation associated with that
merchant and consumer for the approved amount. This restricts the ability of a consumer to
spend more than the stipulated amount.
» The authorisation response is further
forwarded by the payment processor system
to the payment gateway.
» It forwards the response to the website,
where it is displayed as relevant response and
then retrieved back to the merchant and
cardholder. This is known as authorization or
“Auth”
» Later the above process is repeated when
the merchant fulfills the order. This time it is
done to clear the authorization by completing
the transaction. This results into the clearing the authorization and prepares merchants to
settle with the merchant bank.
» Via the processor the settlement is carried out completely when all the responses from
merchant side is approved and authorized.
This entire process is carried out under strict security encryption and the settlement of the
funding most probably takes within to 3 days.