How does a payment gateway works?

In order to have an online business, wheter it’s a website with a shopping cart o through social media with a payment link, you must implement a gateway that allows you to receive online payments. Each payment gateway will offer you different commisions, services and integrations with the main E-commerce platforms in Chile.

Before telling you the step by step (which are many, but quick and that the buyer hardly notices), we must identify the actors that participate in the process: seller, client, issue bank and receiving bank.

How does a payment gateway work?

  1. The first thing that happens is that, when the consumer is ready to make the purchase, the website will redirect him to the payment gateway (it may happen that the buyer doesn’t notice this change, since there are payment gateways that have APIs that manage to personalize the purchase process and make that everything is directly on the business website.
  2. Then, the client will have to intruduce the card information or bank details; to go through an encryption process, in which the payment gateway encripts the sensitive data between seller and buyer. This ensures a secure transaction!
  3. The issuing bank checks whether there is indeed a balance in the account or a limit on the credit card.
  4. In turn, the payment processor contacts the merchant’s account. If the transaction is authorized, the acquiring entity collects and settles the balance in the merchant’s account.
  5. The client receives a notifications saying that the transaction was succesful.

Do you want a payment gateway for your business, but are not sure how it will help you?
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