You have a great idea, you have the enthusiasm, you even have the money to get started, but what you don't have is an electronic payment gateway to start accepting credit cards to sustain your business. You can't sell online if you can't take credit cards, and to accept credit cards you need a payment gateway.



A payment gateway is a service that automates the payment transaction between the shopper and merchant. It is usually a third-party service that is actually a system of computer processes that process, verify, and accept or decline credit card transactions on behalf of the merchant through secure Internet connections. The payment gateway software can also be an in-house product that allows a merchant to accept credit cards and other forms of electronic payment. Payment gateways used for Internet transactions are also known as IP payment gateways.

An electronic payment gateway virtually connects your website to the credit card companies. An electronic gateway has an API (Application Programming Interface), which in simple words is a secure website where you process credit cards for your customers. It also comprises of a virtual terminal for you to enter your credit card information, for instance when you land an offer via the telephone.

After punching in all the required details, a customer hits submit and by doing that initiates the process of credit card payment processing, which is as follows. This request travels to a transaction processor or platform that then authorizes it or declines the transaction if they have the authority to do so. If not, the same is sent over to the acquiring bank. The response from the acquiring bank is then sent to the card association which further passes it on to the issuing bank. The issuing bank then authorizes or declines the transaction and sends the response back up the chain through the card association, to the acquiring bank, to the transaction processor, to the electronic payment gateway and then finally the response is displayed to the consumer.

Gateways are usually equipped with tools that provide an exceedingly comprehensive fraud protection service. With fraud protection products merchants are now able to fight fraud much better. With good security, chargebacks can be a thing of the past.

Once the merchant receives a confirmation from the electronic payment gateway that the credit card payment has been completed successfully, he can go ahead and ship the goods purchased by the customer. A batch is usually automatically run at night and this will complete the transaction.

To apply for the services of an Internet Payment Service Provider you have to use their proprietary gateway. And by doing so you are in compliance with Visa and MasterCard. When your customers are directed over to the third party processor's secure webpage, the name of your business as recognized by the consumer must be allowed to co-brand with the third party processor. When the customer checks his credit card details he will know who he has paid and the same information must also figure on this page.