Payment Gateway provides the service for charging a fee to the merchant for handling the transaction. The service is similar to the point of sale terminal that is used in retail stores. Payment gateways protect the credit card details of consumers by encrypting the information during the transmission of information from the retailer to the credit card company. Payment Gateways provide a secure means of transferring consumer information from websites, cell phone and voice commands to banks and credit card companies.
The transaction process through the payment gateway may be sometime complex and includes the following steps.
- 1. When a transaction is processed, the merchant sends the details to their payment gateway.
- 2. The payment gateway then sends the transaction information to the payment processor.
- 3. The payment processor forwards the transaction information to the credit card company, i.e. Visa / Mastercard / Discover.
- 4. The credit card company then authorizes the payment and proceeds to transmit the funds to the merchant.
Magento® comes with various payment gateway modules for eCommerce businesses. When making a purchase of a product or service on a Magento® storefront, the buyer interacts with the payment gateway in order to pay for the products he or she has purchased. PayPal is a good example of a Payment gateway.
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