PAYMENT GATEWAY

 

 

̃          A medium which provides safe and reliable link between CUSTOMER, COMPANY or WEB PORTALS offering e-Commerce and Bank.

 

̃          Payment Gateway Provider (PGP) gives following services ---

 

(a)        Finds out genuineness of Customer’s Credit Card.

 

(b)        Warranties Credit Card related information such as Password.

 

(c)        Obtains updated knowledge about the Credit Cards from banks or Financial institutions issuing these cards.

 

(d)        Ascertains that customer’s account has sufficient balance for the transaction being entered into.

 

(e)        Transfers cash from customer’s bank account to merchant account of the company or the Web site offering e-Commerce through a confidential and trusted method.

 

̃          All the above are performed in a secure manner on a confidential technology-platform called Secured Electronics Technology (SET)

 

̃          Under this technology, Customer’s Credit Card No., PIN and Password related information is not sent through internet but through its own network in an encrypted mode. Thus possibility of leaking of information is minimized.

 

 

 

 

Payment Gateway : Methods of Working

 

Any transaction through Payment Gateway involves ---

 

(i)                    Company providing the product or services for sale or the Website.

 

(ii)                    Customer

 

(iii)                    Banks or FIS issuing Credit Cards.

 

(iv)                    Payment Gateway Providers

 

(v)                    Government recognizing such transaction.

 

All the above must be approved by RBI.

Steps :

   

 Step I

v                      Customer goes to the website offering the products for sole and confirms his desire to purchase.

 

v                      Website takes the customer to a webpage which is very important since on this web page customer provides all his Credit Card related information. Normally this web page is provided by the Payment Gateway Provider.

 

v                      PGP encrypts all the information given by the customer so that it is not even known to the website.

 

v                      In case web page is provided by the website, it conveys this information to Payment Gateway with a Merchant I.D. payment Gateway through this I.D. knows which website or company has sent this information.

 

 

 

Step II

v                      Payment Gateway sends this information through its own high speed network to Credit Card processors.

 

Step III

v                      Credit Card Processors sends this information to the bank which has issued this Credit Card.

 

v                      Bank confirms the genuineness of Credit Card.

 

v                      Bank also evaluates the credit available in customer’s account.

 

v                      At last bank confirms availability of credit or otherwise to the Payment Gateway.

 

Step IV

v                      Payment Gateway passes on immediately this information to the website.

 

Step V

v                      Website or company delivers the product or services to the Customer.

 

v                      Website or company sends an electronic request to Payment Gateway to transfer funds to their account from the concerned bank.

 

v                      Payment Gateway sends this request to concerned Bank which transfers Credit to Merchant Account of the seller.

 

 

MERCHANT ACCOUNT

 

 

Merchant Account is an account opened by the website or company in a recognised scheduled bank (approved by RBI) for covering all transactions through internet only.

 

Vijay Kumar

DyCAO/TA/ER