In this modern age of business, many business are making their products and services available online for their customers and earning huge profits. Which doing online business, if you are not aware of Payment Gateway, collecting payments from customers is a big challenge. In this article, I will explain you about what is Payment Gateway and how does payment gateway works. In my upcoming article, I will guide you to register for a payment gateway to start collecting online payments from your customers.
Let’s get started !
What is Payment Gateway?
Payment Gateway is an e-commerce application used to accept payments from your customers. Basically we can call Payment Gateway company as a mediator between your business and your customers to collect money from your customer’s debit or credit cards, internet banking, online wallet, UPI, etc. and securely transfer it to your bank account.
How Does Payment Gateway Works?
Following are 5 easy steps which will explain you the process of How Does Payment Gateway Works:
- Step 1: Customer will place the order from your website by clicking on checkout button, and order total amount with customer details are collected for further processing
- Step 2: Payment Gateway will then redirect the customer to a secured page where customer has to select their preferred payment option such as Credit Card, Debit Card, UPI, Wallets, etc. Then customer is redirected to the banks page to authorize the transaction.
- Step 3: If transaction is successfully authorized, bank will then check if customer is having enough funds in their account to successfully complete the transaction or not.
- Step 4: If transaction is successful, the order amount is deducted from customers bank and Payment Gateway will notify customer regarding successful transaction. And if transaction is failed, Payment Gateway will notify customer regarding failed transaction.
- Step 5: If transaction is successful, Payment Gateway will deduct their transaction charges (usually 1% – 2% of the transaction amount) and transfer the amount in your bank account as per their payment cycle.
I hope above details gave you basic understanding about what is payment gateway and how does payment gateway works. If you too would like to integrate Payment Gateway in your website and start collecting online payments from your customers, then click here to get all the details. I have also covered in my article, that how can you collect payments even if you don’t have a website. It’s super easy and a helpful tool for your business.