The inner workings of gateway payment processing is complicated — which is why so many companies are frightened at the concept of integrating new tools and services into their payment platforms.

But, like most things in life, the concept of gateway payment processing is only as complicated as you let it be. When broken down into a step-by-step process, and into simple, digestible explanations of how the world payment processing works, it becomes a lot easier to understand.

The biggest thing to remember when exploring the topic of gateway payment processing is understanding that payment processing itself is not a single concept. To break down this process, we must think about how payment processing works online both for card-based transactions, and transactions not involving cards.

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A Look Inside the Process of Gateway Payment Processing

The first step in any transaction is the authorization request from the merchant to the payment gateway. Using gateway in the literal sense, think of a the payment gateway as being the bridge between the merchant and the payment processor that authorizes the transaction from the card issuer, payment network, or a customer’s bank.

Why gateway payment processing is so important is that it adds a layer of security to protect both the merchant and the customer. Not only does this process allow for suspicious activity to be flagged, it enables the merchant to know that there are in fact funds to pay for a particular product or service. Without this step in the payment process, conducting business transactions would create quite a mess for the merchant.

Following the authorization request, a gateway payment processing system is equipped with the knowledge from the proper party to determine if a transaction can actually occur. Things that would prohibit a purchase from going through would be things like an expired card, a closed account, a credit card over its limit, or lack of funds.

From there, the gateway payment processing enables the transaction to go through, and gets the process closer to the funds settlement stage. After authorized, either as a credit on or a debit from an account (both card-based or non-card based), the merchant will send a settlement request via that payment gateway. From there, the merchant is either given permission to remove funds from an account, or in the case of a return, add funds back into an account.

What complicates the gateway payment processing even more is that there is different settlement timing for different types of payment products. Based on the approval process from the card issuing company, bank, or payment network, the funds may be removed or returned immediately after the authorization process. But based on the type of regional regulations for a specific type of transaction, the gateway payment processing authorization may occur at different times.

 

How Payline’s Gateway Payment Processing Helps Businesses

For businesses looking to simplify how they take payments online, Payline offers a payment gateway equipped with all the tools and features needed to power business transactions online. With the right payments partner by your side, and the right payment gateway that enables faster transactions, you can create better payment experiences for your customer.

Whether you’re looking for subscription billing, data security, an account updater to protect your customer’s information, or top-notch fraud protection, Payline can connect the right solution with your business’ needs.

Not only does Payline offer eCommerce sites apps and a payment gateway with built-in security and fraud protection that can easily be integrated into the payment experience, Payline offers solutions that are built to help your business scale at the rate you want to grow.

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Anna Lothson is a content contributor for Payline Data. She previously wrote for PYMNTS.com, as a Sr. Content Producer, where she focused on financial services and payments innovation, fraud and security, emerging payments, and FinTech news, research and thought-leadership content across the payments industry.