Payment Gateway integration

Posted By: Rimjhim Jain Published: 14, Jan 2024

Payment Gateway Integration

What is Payment Gateway?

Payment gateway is service or technology through which money is sent or recieved online .in other words, a payment gateway is a service used to send and receive money online between a customer and a merchant, or you can also call it a means of collecting digital or online payments for a business. .

Whenever you do any online transaction, in which your Debit Card, Credit Card, Net Banking or Payment Wallet is used, then that transaction is possible only through payment gateway..

Let us now understand this with a small example, suppose you have to buy a shirt for yourself from an ecommerce website like Flipkart or Amazon, then after looking a lot in that ecommerce website, select any shirt according to your choice. have done it. Now finally when you want to buy that shirt, a page related to payment will open in front of you, in which you will be asked to fill the information of your Debit Card, Credit Card etc. such as Card No, Expiry Date, CVV etc., And after completing the process, you will also make the payment. So here, the work of making the payment made by you safely to the merchant's account is the work of the 'Payment Gateway' only.

Why Payment gateway is necessary.

Payment Gateway provides an easy and secure platform to a customer or a businessman through which he can buy and sell goods online.

Today, where online business is dominated, people buy or sell products through the Internet, so it is natural that if the transactions are done online, then the online transaction of money can be done safely only through the payment gateway.

Today, the transaction of all ecommerce companies is managed only through the payment gateway, that is, it is difficult to even think about ecommerce without it.

How does payment gateway work.

The main task of a payment gateway is to process credit card information of online customers dropping to your e-commerce store for example.

1. The customer presses the “Place order button at checkout. The browser encrypts the payment details and sends them to the merchant’s web server via SSL connection.

2. The merchant sends these details to a gateway – again via an encrypted SSL connection.

3. The payment gateway sends the information to the payment processor, which, in turn, forwards it to the card association (Visa, MasterCard, etc.).

4. The bank that issues the credit card receives an authorisation request and sends a response code back to the payment processor. The response code contains information about the transaction status (approved or failed) and the error code in case the transaction failed (insufficient funds, etc.).

5. The payment processor sends the response code on to the gateway, and from there it’s forwarded back to the website.

6. The website displays a relevant message to the customer. The whole process takes as little as 2-3 seconds

Payment gateway types and Providers

Hosted Payment Gateway.

In the hosted payment gateway, the customer leaves the merchant website page and takes him to the payment gateway application. This payment page is hosted by a Payment Service Provider (PSP). Here the payment gateway works as a 'Third Party' because the customer has to leave the merchant's website and visit the Payment Gateway page to make the full payment.

When the customer clicks on the given gateway link to make payment, it redirects him to the Payment Service Provider (PSP) page. After this, the customer makes the payment by filling his payment information there and after making the payment, it is sent back to the website. The most famous and widely used example of Hosted Payment Gateway are Paypal and also GTpay, CCAvenue, EcoBank etc. These payment gateways are easy to install and use. Most of the online payment service providers nowadays are compliant with the Payment Card Industry (PCI) which usually provides fraud protection to the customers.

Self-hosted Payment Gateway

In Self Hosted Payment Gateway integration, accepts online payment from the customer without leaving the merchant's website page. In this, the customer makes the payment on the merchant's website itself, not being directed to any external gateway page. In self-hosted payment gateways, e-commerce collects payment information from the customer within the website itself, but the cardholder data information has to be handled more responsibly from the point of view of security measures.

This type of payment gateway is good from the customer point of view as the entire transaction process is completed on one page. In this, the merchant has more control on the page over how the payment gateway looks and works. QuickBooks and Shopify are examples of self- or self-hosted payment gateways and are both powered by Stripe.

API or Non Hosted Payment Gateways

Like self-hosted payment gateways, API-hosted payment gateways allow customers to fill in their credit or debit card payment information directly on the merchant's checkout website page, but in addition, using Application Programming Interfaces (APIs) or HTTPS Queries. Processes online payment. The merchant has complete control over the user interface (UI) of payment processing as it does not involve any redirect to the webpage.

The non-hosted payment gateway integration gives customers a seamless one-page payment checkout experience. It is able to use on other devices like mobile, laptop including tablet. PayU, Stripe, BrainTree and Adyen are some examples of non-hosted payment gateways.

Payment Gateway Providers.

• Paytm
• Instamojo
• PayUMoney
• PayPal