Life-cycle of Digital Payments for a Card Payment Gateway

The concept of digital payments was born out of convenience and control for consumers. It is only natural for this concept to be consumer-centric as in all markets the consumer is king. Today we will take a closer look at the complex process of digital transactions in a card payment gateway that make life so easy for us. The gateway is a piece of technology through which several merchants and platforms are able to connect from the website to their customers’ mobile devices.

Verification

Once on the other side of the payment gateway, vendors ensure the transaction and consumer behind the transaction is legitimate. Vendors verify details by matching shipping and card addresses, CVV code, blacklisting for credit card default, and IP address. These checkpoints are essential to protect merchants from unnecessary and avoidable costs.

Involvement of Banks

After all the verifications are made, payment requests are routed to the customer’s issuing bank and the merchant’s acquiring bank. Funds are exchanged between these two parties. The card payment gateway sends the initial transaction request to the merchant’s acquiring bank, in response to which this bank requests a payment from the customer’s bank via the payment gateway. When communicating with the customer’s bank, payment gateways run a series of fraud prevention measures. The message of a declined transaction is relayed by the gateway to the customer through the merchant and all in a matter of microseconds.

Settlements

If things have flowed smoothly till this point, the merchant sends a ‘settlement request’ which is a way of confirming their action of charging the customer’s issuing card.

Bill Splitting

Some payment gateways even have an option to divide funds between sellers and facilitating platforms and maintain individual ledgers to do so.

All digital payments through payment gateways follow this cycle. A card payment gateway that stands apart is one that is reliable, secure, scalable, and offer tech-support. Easebuzz is one such platform that enables quick and easy payments end-to-end for upcoming businesses across India.

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