What is a Payment Gateway and how does it work?

A payment gateway is a technology that merchants use to collect debit or credit card payments from customers. The word refers to both actual card-reading machines seen in brick-and-mortar retail outlets and payment processing gateways found in internet retailers. A payment gateway is a merchant service offered by an e-commerce application service provider that allows credit card or direct payment processing for e-businesses, online merchants, bricks and clicks, or classic brick and mortar. The payment gateway may be supplied to consumers by a bank, but it may also be provided as a separate service by a specialized financial service provider, such as a payment service provider. A payment gateway enables a payment transaction by transferring data between a payment portal (such as a website, mobile phone, or interactive voice response service) and the front-end processor or acquiring bank.

With the simplest integration, entirely online onboarding, feature-rich checkout, and best-in-class speed, Razorpay allows you to swiftly go live and experience the future of payments. Razorpay accepts all payment options, including domestic and international credit and debit cards, EMIs (credit/debit cards and cardless), Pay Later, Net banking from 58 banks, UPI, and 8 mobile wallets. Checkout with cards stored across companies that are simple to implement so that your customers may pay smoothly wherever. Get complete data and statistics on payments, settlements, refunds, and much more to help you make smarter business decisions. APIs, plugins, and libraries that are robust, clean, and developer friendly for all major languages and platforms, allowing you to focus on developing great things. PCI DSS Level 1 compliance, as well as periodic third-party audits and a dedicated internal security team, ensure that your data is always secure. Manage your payments, refunds, transfers, subscriptions, invoices, virtual accounts, API credentials, webhooks, and anything else. Gain real-time data and insights to make more educated business decisions. View vital statistics and create a bespoke settlement and reconciliation reports. We recognize that when it comes to payment management, quickness and convenience of use are the most important factors. We've put in countless hours to make it a fantastic experience for you.

Expand your business with the payment gateway that powers some of India's most well-known companies, as well as the Paytm App.

Paytm provides 100% online onboarding with little documents to assist your business in going online with ease. Using Paytm's comprehensive APIs and bespoke SDKs, you can begin collecting digital payments in about 30 minutes with only a few lines of code. Allow your consumers to pay whatever they choose with support for debit and credit cards, Net banking, UPI, Paytm Wallet, and other payment methods.

Website and mobile app payment gateway

Accept online payments to help your business flourish. Customers will be delighted with the highest success rates on mobile and UPI, as well as access to payment gateway sophisticated features. Accept digital payments via 150+ ways and achieve industry-leading success rates. Integrate with our APIs, SDKs, and online onboarding!

Cashfree Payments' payment gateway is dependable and scalable with you. Process 3000 transactions per second without interruption.

More than 120 payment alternatives

Allow your clients to pay with any card, 65+ net banking choices, UPI, Paytm & other wallets, EMI, and Pay Later.

Payment gateway settlements are completed faster.

Accept payments and get quick pay-outs even on bank holidays.

Expand your horizons.

Unlock foreign payment alternatives to reach clients all around the world. Display goods in over 100 different currencies. 2 days of INR settlements.

Dashboard provides centralized control.

Examine the history of each transaction - order creation, payment status, refund, and so on.

Real-time check settlements and adjustments

Monitor and respond to ongoing disputes and questionable transactions.

Affordability fuels corporate growth.

Give your consumers inexpensive options. Payment alternatives such as EMIs and BNPL can help your business expand.

PayU is India's top payments solution provider, serving over 5 lakh enterprises. PayU enables companies to accept online and offline payments using 150+ payment methods including Credit Cards, Debit Cards, Net Banking, EMIs, BNPL, QR, UPI, Wallets, and more. PayU payment gateway has the greatest success rate and provides a smooth and secure checkout experience.

The most important participants in online payments

Before delving into the concept of a payment gateway, we must first define the important participants in online payments. When a consumer hits the "Pay" button on your website, the following individuals are engaged in the payment process:

The merchant: this is you, an online business in any industry (travel, retail, eCommerce, gambling, Forex, etc.) that provides a product or service to clients.

The client: the customer, also known as a cardholder, who wishes to purchase the goods or services offered by the business and begins the transaction.

The issuing bank is the customer's bank, which issues the cardholder's credit or debit card on behalf of the card companies (Visa, Mastercard).

The acquirer, often known as the acquiring bank, is the financial institution that holds the merchant's bank account (also known as the merchant's account). To obtain payment, the acquiring bank forwards the merchant's transactions to the issuing bank.

How does a payment gateway function?

Now that you understand why retailers require a payment gateway, let's look at how a payment gateway functions throughout the payment experience.

The consumer selects the product or service they wish to buy and goes to the payment page. Most payment gateways provide you with a variety of payment page alternatives. The following payment page alternatives are available through emerchantpay's payment gateway for your business's needs:

Payment page hosted

A hosted payment page is a pre-built payment page to which consumers are forwarded when they are ready to check out. Before passing the transaction data to the acquirer, the payment gateway secures it. If you do not collect and/or store credit card information, a hosted payment page decreases the PCI load for online retailers.

Server-to-server communication

A server-to-server connection, also known as a direct integration, allows communication between two servers: the merchants and the payment gateways. A direct transaction can be initiated by asking for the card details on the payment page. Customers may complete a card payment without being transferred to the payment gateway's payment page, resulting in speedier checkout, a more consistent user experience, and greater merchant control over the design and feel of the payment page. If you gather and/or keep payment data before transferring it to the payment gateway for processing, a server-to-server interface is appropriate.

Client-side cryptography

Client-side encryption, also known as encryption-at-source, refers to the process of encrypting sensitive information on the client-side device before transferring it to the merchant's server. This allows the merchant to reduce the complexity of your PCI compliance obligations. In a word, it allows you to take payments on your website while encrypting card data in your browser using the encryption library provided by the payment gateway.

On the payment screen, the consumer enters their credit or debit card information. The cardholder's name, card expiration date, and CVV number are among the information provided (Card Verification Value). Based on your integration, this information is securely transmitted to your payment gateway (hosted payment page, server-to-server integration, or client-side encryption).

Before sending the card data to the acquiring bank, the payment gateway tokenizes or encrypts the card details and performs fraud checks.

The information is securely transmitted to the card schemes by the acquiring bank (Visa, Mastercard).

Card schemes provide an additional layer of fraud detection before sending payment data to the issuing bank.

After undertaking fraud screening, the issuing bank approves the transaction. The payment message is returned to the acquirer once it has been accepted or denied by the card schemes.

The acquiring bank returns the approve or deny notification to the payment gateway, which forwards it to the merchant. If the payment is accepted, the acquirer receives the payment amount from the issuing bank and deposits it into your merchant account (more on that later on).

puts the monies into the merchant's account, a process known as settlement; when the actual settlement occurs is determined by the merchant's agreement with their payment gateway.

Depending on the message, the merchant may display a payment confirmation page or request that the consumer supply another payment method.

A payment gateway benefits both businesses and customers, while much of its activity occurs in the background of the transaction. All of the above processes can occur in near real time or in less than three seconds!

How do I configure a payment gateway?

To set up a payment gateway for your website, you must first obtain all prerequisites and establish configuration instructions from your PSP.

How to Select the Best Payment Gateway for Your Company?

Payment gateways and merchant accounts may appear difficult, but they do not have to be. emerchantpay is a full-service payment solutions provider with a PCI level 1 certification. Consider it a one-stop shop in which your payment service provider provides you with a customizable, user-friendly payment platform that includes a payment gateway, acquiring, popular Alternative Payment Methods, shopping cart integration, and fraud screening services.

All of this information about payment gateways might be confusing. We understand that selecting the correct online payment partner is an important choice for your company, which is why we created our unified payment platform with a focus on customer experience in mind. You will be able to provide superior online experiences and smooth customer journeys to your customers by using a payment solution designed for today's demanding consumers.