Merchant Articles

Payment Gateways- Finding the best payment gateways and cheap payment gateways are one of Business Merchant Account’s niches. We use payment gateways all the time and have written this payment gateway review to help you find the best payment gateways.

If you are running an eCommerce website you should be using a payment gateway. Payment gateways are crucial to accepting credit card payments and even debit card payments. Payment gateways are the equivalent to point of sale terminals or credit card processors at traditional stores. Payment gateways are the link between the customer, business, and financial institutions.

Not only do payment gateways assist in the processing of credit cards, but they also are one of the key factors in making an online transaction secure. It is a payment gateways job to to ensure that information passes securely between the customer and the merchant and also between merchant and payment processor. With the combination of SSL certificates and payment gateways your transaction is pretty secure. Payment gateways protect credit card information by encrypting sensitive information that is contained in the card. That sensitive information includes the credit card numbers, and the account holder’s information.

How is this sensitive information secured? There are three main steps to securing that sensitive information. The first step is the entire order is processed through the HTTPS protocol. HTTPS stands for Hypertext Transfer Protocol Secure and is a combination of the Hypertext Transfer Protocol with the SSL/TLS protocol to provide encryption and secure identification of the server. The second step is the necessity to have a signed request or password presented in order to confirm and validate the purchase. The third and final step is to have the IP address of the requesting server (Customer’s) during the payment process to be verified.

Now that you have a basic understanding of payment gateways, Business Merchant Account has put together a list of the involved payment gateway steps.

1. Your customer selects and places their order into a shopping cart. Once finished shopping they click the "Complete order" or "Submit order" button in the shopping cart software.
2. The customer's web browser then automatically encrypts the information to be sent from their browser to the merchant's web hosting provider. This is done via SSL certificate encryption to keep it secure.
3. The merchant gets notified of the pending transaction and then forwards the transaction details to their payment gateway. This is also done using a SSL certificate that encrypts the sensitive information.
4. The merchant’s payment gateway forwards the transaction information to the processor used by the merchant's acquiring bank.
5. The processor forwards the transaction information to the card issuer. This can be a financial institution or credit card company. The most popular card issuers are Visa, MasterCard, Discover, and American Express. That is why it is important to accept all major credit cards.
6. The credit card or debit card issuing bank receives the authorization request and sends a response back to the processor via an SSL encryption connection. Along with the response is a response code. The response code will state if the transaction was approved or denied and if denied why it was.
7. The merchant’s processor forwards the response to their payment gateway.
8. The payment gateway receives the response, and forwards it on to your eCommerce website at which time it is interpreted. Your shopping cart software will automatically do this and also send a relevant response is then relayed back to the cardholder and the merchant.

Those are the basic steps on how an online purchase takes place involving payment gateways. While that process sounds like a long time, it actually only takes place over 2-10 seconds. Most of the time it is under 5 seconds. Payments are then paid to the merchant about three days after the transaction is completed.

There are several good payment gateway companies. When trying to find the best payment gateways it is important that you compare each one so that you know you are getting the best payment gateway.

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