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Payment Gateway Workflow

The document outlines the 12 steps in an online payment transaction process: 1) A customer initiates a purchase on a merchant's website. 2) The payment gateway receives and encrypts the transaction details for security. 3) The gateway forwards the encrypted details to the acquiring bank which sends an authorization request to the card network. 4) The card network validates details and checks funds, sending the authorization response back to the acquiring bank through the gateway. 5) The gateway relays the authorization status to the merchant who can then fulfill the order if approved.

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Sugam Kant Garg
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© © All Rights Reserved
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Download as DOCX, PDF, TXT or read online on Scribd
30 views

Payment Gateway Workflow

The document outlines the 12 steps in an online payment transaction process: 1) A customer initiates a purchase on a merchant's website. 2) The payment gateway receives and encrypts the transaction details for security. 3) The gateway forwards the encrypted details to the acquiring bank which sends an authorization request to the card network. 4) The card network validates details and checks funds, sending the authorization response back to the acquiring bank through the gateway. 5) The gateway relays the authorization status to the merchant who can then fulfill the order if approved.

Uploaded by

Sugam Kant Garg
Copyright
© © All Rights Reserved
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd
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1.

Initiation:

 The customer initiates a purchase on the merchant's website.


 The merchant's website sends a request to the payment gateway to start the transaction.

2. Request Transmission:

 The payment gateway receives the transaction request.


 The request typically includes the transaction amount, currency, and other relevant
details.

3. Encryption and Security:

 The payment gateway encrypts the sensitive information (e.g., credit card details) to
ensure secure transmission.
 Security protocols such as SSL/TLS are employed to protect the data during transmission.

4. Forwarding to Acquirer:

 The payment gateway forwards the encrypted transaction details to the acquiring bank
(acquirer).

5. Authorization Request:

 The acquiring bank sends an authorization request to the card network (e.g., Visa,
MasterCard).

6. Authorization Response:

 The card network validates the transaction details and checks the customer's account for
sufficient funds.
 An authorization response is sent back to the acquiring bank through the payment
gateway.

7. Authorization Status to Merchant:

 he payment gateway relays the authorization status (approved or declined) to the


merchant.

8. Transaction Approval:

 If approved, the merchant proceeds with fulfilling the order, and the payment gateway
communicates this information to the customer.

9. Capture and Settlement:

 The merchant, through the payment gateway, captures the authorized funds for
settlement.
 Settlement involves the actual transfer of funds from the customer's account to the
merchant's account.
10. Receipt and Confirmation:

 A payment confirmation or receipt is generated by the payment gateway and sent to


both the customer and the merchant.

11. Chargeback Handling:

 In case of disputes or chargebacks, the payment gateway may be involved in managing


the resolution process.

12. Reporting and Reconciliation:

 The payment gateway provides transaction reports to the merchant for reconciliation
and accounting purposes.

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