Wednesday, 4 May 2016

What Is A Payment Gateway?

So today, with a brand new topic to talk on, we are all geared up to know more. “Payment Gateways” the term used worldwide to describe online shopping and online payment through various methods. Most of the merchants are unclear on what payment gateways do in real and why do you need them at the first place. The confusion between the gateway functionality and how it differs from an ecommerce shopping cart is the most active argument among users. And more often we have heard our customers equating payment gateways with merchant accounts.
Today, we are going to throw light on payment gateways and put the gateway in its proper place in the ecommerce credit card processing cycle.

What Is A Payment Gateway?

Payment gateway is a web based service, which is integrated into your Magento ecommerce website shopping cart and collect payment information provided by the customers at the checkout point. The gateway encrypts the data collected and transmits the same to the card issuing bank for authorization. The immediate respond is sent across to the merchant and displayed to the cardholder/ customer. The payment gateway is treated as the point of sale terminus like how it works with brick and mortar business.

What Does A Payment Gateway Do?

This is the most crucial question asked by anyone of us. Just like their counterparts, payment gateways support a full range of processing services like authorization only, authorization and capture, refunds and voids. Every major gateway offers a virtual terminus option which enables the merchants to enter the payment information like completing the transaction over the phone or have received payment over email. Moreover, the virtual terminus allows the merchant to create and save customer profiles within the gateway, which is accessible later for a speedy payment process. Additionally, you can use the virtual terminus to set up the installation or recurring payment plans as well as processing deferred payments.

How Does A Payment Gateway Interact With A Shopping Cart? 

In an ecommerce website or Magento Mobile iOS App or Android, payment gateways and shopping carts enter the transaction cycle at different levels. Shopping cart is one such virtual item, which enables the customers to select items for purchase, and add them into the cart for further process. The total cost of the order, including the shipping and handling charges and taxes are calculated. Once the calculation is shown and approved by the customer, the order is taken to the next level, i.e. checkout where your client is requested to provide the payment information, which is collected and managed by the gateway like mentioned above.

Payment Gateway Vs. Merchant Account:

It is vital to get the point straight. Like POS terminals, payment gateways are tools for handling payment information. Just as the POS terminal is the part of each retail merchant account, the payment gateway is an essential part of every ecommerce merchant account. However, the merchant account services goes beyond simply handling information provided by the cardholder. Services like accepting credit and debit cards, as well as other payment method is done by connecting the merchant’s physical and virtual checkout tools with a processing bank that procures the transaction and funds the merchant’s account the transaction amount, after deducting the transaction processing fee. The whole process, from capturing of information at the point of sale, physically or virtually, to the settlement of the funds is what a merchant account service provides.

With mChannel, you have various options to integrate in your mcommerce mobile app. Most popular payment gateways with us are; CC Avenue, Instamojo, PayU Biz, And PayU Money. Some of our clients also believe in providing Cash on Delivery option for customers who doesn’t wish to make a payment online. So what is cooking latter? Come over and join hands with mChannel- the ultimate Magento Mobile App Builder. Leave us a message at the contact page, or simply email us at and see how fast you are responded from our end. 


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