Payment Gateways
By
Rajkumar
What is Payment Gateway?
A payment gateway is an e-commerce
application service provider service that
authorizes payments for e-businesses(ex:
online shopping carts)
Before going to the payment gateways first we
need to know the following terms.
Terms which are related to payment
gateway
E-commerce
Web services
Payment Process
E-commerce
Electronic Commerce, commonly known as (electronic
marketing) e-commerce or eCommerce, consists of the
buying and selling of products or services over electronic
systems such as the Internet and other computer
networks.
Web services
A Web service is defined by the W3C as
"a software system designed to support
interoperable machine-to-machine
interaction over a network”.
For accessing every web service we need
an API(Application Program Interface)
key.
Web service is a platform independent.
Payment Process
A payment process is nothing but an
transaction of money between the users
and merchant (owner of the product).
In payment process we need there are 2
types of accounts.
• Business Account (user)
• Merchant Account (owner)
Online Shopping Example
The Payment Gateway Workflow should
be inserted before the checkout.
After the confirm order page will the
payment gateway workflow be activated
Working of Payment Gateway
Visitor places the order on the website and it is
sent to the merchant's web server in encrypted
format. This is usually done via SSL (Secure
Socket Layer) encryption. Content organization
The transactions details are then forwarded to
the concerned Payment Gateway.
The transaction information is then passed on to
the merchants acquiring bank by the Payment
Gateway.
Merchants acquiring bank then forwards the
transaction information to the issuing bank (one
that issued the credit card to the customer).
Then the card issuing bank sends a response back to
the Payment Gateway. The response includes
information that whether the payment has been
approved or declined. In case of declination the reason is
also sent in the response.
The response is then forwarded by the Payment
Gateway to the merchant’s server.
At merchants server the response is encrypted again
and is relayed back to the customer. This allows the
customer to know that whether the order has been
placed successfully or not.
The entire process typically takes less than 5 seconds.
Flow of payment process
What is SSL?
SSL stands for Secure Socket Layer
Payment Gateways encrypt sensitive
information, such as credit card numbers,
to ensure that information passes securely
between the customer and the merchant.
SSL used HTTPS protocol.
Types of Payment Gateways
PayPal (Global)
Authorize. Net (US)
VeriSign (Global)
Link point (US)
2Checkout (Global)
World Pay (Global)
Cyber Source (US)
Protx (UK)
EWay (AU)
Moneris (CA)
QuickBooks Merchant Services (US Only)
Types of credit cards
Gateway advantages
Gateways can provide many benefits, with its main benefit being security.
We recommend to all our customers that they use a payment gateway to
handle all credit card payments. While VP-ASP does provide credit card
number encryption and can ensure that the software is secure, it is still
stored in a location that a hacker may be able to access. Whereas, when
using a payment gateway, the credit card information is sent directly to
the bank for verification and therefore no credit card details are stored.
In addition to security, payment gateways also provide the following
benefits:
Credit card validation and processing in real time
Less fraud (but there are many stolen credit card numbers floating
around)
Money is normally deposited into your bank account automatically
Reports and refunds normally allowed via browser by gateway company
(not VP-ASP)
Gateway Disadvantages
Every gateway company charges fees. Fees can include some
or all of the following:
Fixed fee per month
Percentage fee per amount spent
A fixed fee per transaction
In addition your own bank or the gateway's bank will
charge a merchant fee for the privilege of allowing credit
card purchases. This can range from 1-5% or more.
Getting API certificate and
credentials from Paypal
To create an API certificate, you must have a PayPal Business or
Premier Account. Login into your existing Business or Premier
PayPal Account, or create a new PayPal Business or Premier
Account.
Click the Profile tab in the My Account sub-menu.
From the Profile Summary page,
click API Access under the Account
Information header.
From the API Set-up page, click
Request API Credentials in the
right-hand box.
The Download or Remove API
Certificate page displays your API
credentials and allows you to
download your API certificate.
Save the values for API Username and
Password.
Click the Download Certificate button.
You are prompted to download a file called
cert_key_pem.txt. This file is your live
API Certificate.
Rename this file to something more
familiar, such as paypal_live_cert.pem. It
is not necessary to keep the .txt file
extension. Be sure to remember where
you save the file.
QUERIES?
THANK Q
