The 'How to' in Secure Payment Gateway

By: Caroline Blair<br /><br /><br />Have you ever wondered how Secure Payment Gateway works? How your virtual terminal manually processes all your credit card transactions? One of the first few things that any merchant would have to look through is how such a system works. <br /><br />By knowing such, the merchant is made aware of the ins and outs of Secure Payment Gateway thereby never getting intimidated again with such complicated matters, plus, he can focus on more important things at hand, such as his growing online business. <br />What&#39;s the first thing a merchant should do?<br /><br />First, the merchant should submit a credit card transaction to his secure payment gateway provider on behalf his customers which they will secure via the merchant&#39;s web site, at retail, from a MOTO (Mail Order / Telephone Order) center or any wireless device. <br /><br />After the provider receives the transaction information, they will pass it through a secure connection to the Merchant Bank&rsquo;s processor. <br /><br />The merchant bank&rsquo;s processor then presents the transaction to the credit card Interchange (in this procedure, the transaction will undergo processing, clearing, and settlement of all credit card transactions): <br />1.It routes all transactions to the customers credit card issuer.<br />2.The issuer will either approve or reject the transaction which will be solely based on the customer&rsquo;s available funds. If this is approved, the transaction will be forwarded again to the Credit Card Interchange and appropriate funds will materialize. <br />3.Then the credit card interchange will relay all information to the merchant bank&rsquo;s processor. <br /><br />Lastly, the merchant bank&rsquo;s processor communicates all transaction results to the provider. The provider will store the results and eventually send them to the customer and/or the merchant. One of the great things about all of this is that it happens in an average of three seconds or less! The whole interchange authorizes the appropriate funds to be transferred to the Merchant&rsquo;s Bank, which eventually deposits all funds to the merchant&rsquo;s bank account. In just two or four days, all funds are deposited to the merchant&#39;s primary bank account within two to four business days. <br /><br />Secure Payment Gateway may seem too complicated a term but once the merchant knows how a process works, he or she won&#39;t have to worry about the convenience not to mention security it provides. <br /><br /><br /><br /><em>(Caroline Blair, a native from Boston, has effectively lectured on the &ldquo;Importance of Secure Payment Gateways to today&#39;s web wondering Entrepreneur&rdquo;and has deemed a significant amount of praise for her contribution to Cambridge Business Students by raising the bar in terms of Risk Management Modules and eCommerce importance)</em>