A payment gateway acts like a secure bridge between the customer, the merchant, and the bank. It makes online payments smooth, safe, and instant. Here’s how it works:
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Customer Initiates Payment
The customer enters card details or chooses a payment method at checkout. -
Data Encryption
The gateway encrypts the information to keep the card details safe from fraud. -
Secure Transfer
The encrypted data is sent to the issuing bank or payment processor for approval. -
Bank Authorization
The bank checks if the card is valid and has enough balance, then either approves or declines the transaction. -
Real-Time Response
The result (approved/declined) is sent back to the merchant through the gateway. -
Payment Confirmation
If approved, the merchant receives the confirmation and the order is processed. -
Settlement
The customer’s bank transfers the amount to the merchant’s bank within 1–2 business days.