Payment gateway

Evolution

Have you ever imagined how the world would look like if we had to pay for goods with grains or the
animals we’ve just hunted? For thousands of years, it was the reality we had to cope with. Luckily, these
days are over and a well known instrument ,so called money came into the play. The invention of money
helped us to pay correct value for the goods that we bought physically. A few decades later, with
invention of internet ecommerce sites came into existance. Where we can buy anything from any where at
any time.

And this sites introduced the electronic payment method to the customer. The customer then happily used
this option by paying online. But , in the initial stages of buying goods online ,the customers used to face
many problems like internet frauds, hacking and soo on and they were losing their money. The customers
slowly reduced their online play and switched to physical buying .

To solve this problem, and to make the secured and protected payments the ecommerce services recruited
the payment gateways . finally a hero came to rescue the customers who were loosing their money online.

Before knowing about the payment gateway , we need to understand some terminologies:

Merchant – seller of goods/ owner of ecommerce site

Customer – buyer of goods

Customers issuing bank – the bank that issues credit/debit card to the customer. It provides the cards
information and verification.

Merchants acquiring bank – it is the bank in which the merchant have the account.

Processor – it is a third party company appointed by a merchant to handle the functions of authorization
and settlement of funds for the merchant.

Authorization – the process of verifying a customers credit card

Settlement – the process of collecting funds from the customers account

Payment processing service –connects the merchants, customers , and the banks through secure online
transactions.

Gateway – the secure pipe between the banks and the processor
what is a payment gateway?

A payment gateway is simply a software application. Its basically a conduit between an

ecommerce website and the bank that authorizes (or declines) a customers credit/debit card
payment.

 It is a service that sends all your credit/debit card transactions to your credit/debit card
processors
 It also sends you a message from your credit/debit card processor that lets you know a
transaction has been authorized.
 There are even some payment gateways that will autmatically add tax and screen for
fraud.
 It is the final step of the sales process on ecommerce website.

Why Do You Need A Payment Gateway For Website?

1.Secured & Protected Payments as payment gateways are highly secured and encrypted
from fraudulent activities or online theft.
2.24/7 Store for your customers to purchase anytime and anywhere.
3.Shopping cart convenience for better shopping and complete checkout experience.
4.Tracking abilities to track all your transactions (past and present) all at one place.
5.Multiple modes of transactions for your customers to make an online purchase on your
website/app.
6.Multiple Device friendly
7.Faster transaction processing for your customers to make a purchase immediately.
8.Integrated payments & settlements.

How does a payment gateway works?\

Authorization process:

1. Customer decides to make an online purchase and inputs his card information.
a. At first, the visitor places the order on the website and he enters the required information
such as Name, Card details and address, then , clicks on the submit button. This
information is sent to the merchants web server in encrypted format.
2. Merchants website recieves customer information and sends it to the concerned payment
gateway.(payment processing service).
3. Payment gateway routes the encrypted information to the processor.
4. Processor routes information to the bank that issued customers credit / debit card to the
customers. Here the bank check whether the customer has enough funds in his account to
make the payment.after checking….
 5. Issuing bank sends authorization(or declination) to the processor. The bank will authorize
if the customer is eligible to make the payment or it might decline ,in case ,if the
customer does not have enough funds in his account.
6. Processor routes transaction results to the payment gateway.
7. Payment gateway sends results to the merchant. That the customer is eligible or not
eligible to the purchase of goods on his site.
8. Merchant after going through the information sent by the payment gateway decides to
accept or reject the purchase. If the merchant accepts , the customer then need to fill up
the otp that would be sent by the customers card issuing bank to transfer the funds.

Settlement process:

1. The merchant informs the payment gateway to settle the transaction.

2. Payment gateway sends transaction information to the processor.
3. Processor checks the information and forwards settled transaction information to the
issuing bank.
4. Issuing bank transfers the funds to the processor by asking the otp to be entered by the
customer.
5. Processor routes funds to the acquiring bank of the merchant
6. Acquiring bank credits the amount into the merchants bank account.
Thus the process of paying online is completed. The entire process typically takes less
than 5 seconds.

Advantages of payment gateways to the customers:

Advantages of Internet Payment Gateways:

1. SECURE TRANSACTION

A payment gateway checks and validates online transactions. It protects merchants and
customers from flagrant instances of fraud.

2. EASE OF USE

Anyone with basic computer knowledge can perform business transactions using payment
gateways. No need to go through any costly training or learn elaborate setup. It’s simple and
easy.. Everybody can use it.

3. RAPID DEPLOYMENT
 A merchant can immediately utilize payment gateway service for his/her online store. He
need not wait for agonizing time to complete the payment gateway setup in his business.
He can avail it in the quickest time possible.

4. FEATURE-RICH

Internet payment gateways offer lots of customizable features that could greatly benefit
merchants and customers alike. There are security features, payment option choices, card
features, etc…You may turn on all these features or select only the ones that best serve your
type of business.

Disadvantages of payment gateways:

RISK ON SENSITIVE INFORMATION

Remember that a payment gateway deals with customers’ information. Therefore, a payment gateway
company will have files on all sensitive customers’ data—- customers’ names, banks accounts, credit card
numbers, passwords,etc. These are highly valuable data. So there is a chance of loosing info.

ANY TECHNICAL GLITCH CAN TAKE CONSIDERABLE TROUBLESHOOTING TIME

A payment gateway is basically a software. And just like any piece of computer software, it can go awry
at times. When it does, it can have deleterious effects. The customers can no longer access or make
payments online. On the other hand, the software glitch will render merchants’ websites inoperative. It
will take time— maybe weeks or months– to troubleshoot the problem and bring back merchants websites
back to normal functionality.

CUSTOMERS’ UNEASINESS

Fraud is widespread in the Net and this fact scares most customers. They tend to stay away from any web-
based software when making online transactions that involve disclosing personal information. If a
merchant company gets a payment gateway service but the customers will not utilize it for some reasons
or another, then the merchant will be at the losing end of the bargain.
 list of top 10 Payment Gateways in India

• CCAvenue

• Citrus Pay

• PayUBiz

• direcpay

• Zaakpay Payment Gateway

• instamojo

• bill desk

• atom paynetz

• PayUMoney

• ePaisa

Some ecommerce sites and their payment gateways-

1. Snapdeal - payU India

2. Jabong - payU India

3. Freecharge - CCAvenue

4. Amazon - pay with amazon

5. Flipkart - Payzippy (its own payment gateway)

6. Zivame, airtel, meru – citrus pay

CCAvenue serves 85% of indian ecommerce merchants

This made us to present you about the CCAvenue payment gateway

 Founded in 2001.
 Largest payment gateway in india
 Powers mre than 85%of the e-commerce merchants
 Tried and tested payment gateway
 Head quarters is located in mumbai and maharashtra
 Their offices are located in mumbai, haryana , hyderabad, bangalore, chennai.
 Founder and ceo is Mr. vishwas patel.
 Top competitors and alternatives are EBS, BillDesk, TechProcess , PayU Money, airpay,
snapscan, paytm , razor pay,citrus and freecharge.
 Estimated annual revenue $5millions
 Estimated employees : 58
 WEBSITE : www.ccavenue.com

CCAvenue offers two interfaces you can choose from:

 Variable amount interface
 Shopping cart interface
CCAvenue features:
 Maximum payment options
1. 6 credit cards
2. 58+ net banking
3. 98+atm cards
4. 12 prepaid instruments
5. 14 bank EMI
 Multiple currency processing : this feature delivers a localized buying experience and
let your customer enjoy the convienience of paying the currency they know the best on
any global ecommerce sites.
 CCAvenue checkout: quick and simple checkout experience for your returning
customers
 mobile payments: collects payments securely and seamlessly within your iOS , android
or windows app.
Businesses that are not accepted by CCAvenue?
 Drugs
 Replica products
 Gambling
 Sharp objects
 Tobacco and cigarette
 Live plants/animals
 Online trading
 Offensive goods
 Alcohol
 Hacking and cracking