Chapter
1

Introduction to Online Payments


Without the creation of a secure method for moving sensitive data the ability to conduct online commerce could not have happened. Today there are many gateway providers serving up diverse solutions to its customers. 

Especially after the ban on Rs 500 and Rs 1000 old notes, people are looking into using digital payment methods for their money transactions. Digital finance has a great potential to improve sales and business for Indian merchants and consumers, but only a few are aware of this. In fact, only 40% of those merchants who don’t take debit cards were aware they could do so. 

Mobile shopping and making online payments is gaining ground as technology advances. This mandates product and service vendors to offer mobile payment capability to their customers. Moreover, it becomes critical to have a payment processing gateway that runs smoothly within your mobile app.

A payment gateway isn’t a comprehensive solution for online payment processing. It’s just one element of a full-fledged eCommerce site that allows you to accept and process credit cards, debit cards and other forms of payment online. Every time you purchase something online with a credit card, your information has to be verified, the charge authorized and funds transferred. Transmitting data to authorize a transaction is the job of a payment gateway.

A payment gateway can be integrated with most websites and virtual shopping carts to streamline online credit card processing. A shopping cart is usually used before the payment gateway. This function allows your customers to pick and choose the various items they want to buy from your website, including options such as size, color, etc. And at the checkout, the shopping cart totals the items, adds tax and shipping and collects the customer’s shipping and billing information.

Once the shopping cart process is completed, the payment gateway encrypts and store sensitive data, including credit card numbers, ACH account numbers, CVV and CVV2 information. Sensitive data such as Credit Card Numbers need to be protected from any fraudulent activities.

And since security is an integral component of a payment gateway process, the card associations have created a set of rules and security standards that must be followed by anyone with access to card information. This set of rules and security standards is called the Payment Card Industry – Data Security Standard (PCI-DSS or PCI).

For more protection, submitting an order online is usually completed using an HTTPS protocol, which securely communicates personal information through the parties involved in the transaction. This ensures that sensitive information is kept safe while the payment is processed.

A payment gateway service company has gone through the extensive and lengthy process of getting approved to communicate with payment processors. They reduce a business’ liability and ensure that a payment gateway process is safe and secure.

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