The world of finance is shifting its course from traditional real cash methods to instant online payments. Most of the transaction is facilitated with the help of modern online payment platforms. The very thriving nature of business and finance has empowered the retailer to a great extent with numerous benefits. Now an individual or merchant has multiple options to choose from for facilitating a financial transaction. Whether you are a novice entrepreneur or an experienced business owner, having the requisite knowledge about the working of payment gateway and its essential terms gives a competitive edge over others.
Payment Gateway And Its Salient Features
It is an online intermediate channel that facilitates payments transactions both safe and secure. It enables a smooth and prosperous online transaction between consumer and merchant. The e-commerce industry is growing rapidly, there is a need for secure and convenient platforms for seamless financial transactions. A proper payment mechanism can help in the growth and advancement of the business. Here are some salient features of a contemporary payment mechanism:
- Safe and Secure
- Simple and Effective Integration
- Fast Processing Speed
- End to end Encryption and Tokenization
- Multiple Options For Payment
- Comprehensive Reporting and Invoice Options
- Enhanced Customer Assistance
- PCI (Payment Card Industry) Compliance
- Real-Time Bank Settlements
These are some essential characteristics of the latest payment platform. Since the inception of online business or e-commerce in the mainstream, online payments have seen exponential growth. It saves time and is effective for both individual retailers and businesses.
Online payment is a pool of convenience and removes the traditional impediments.
Important Terms Related To Payment Gateway
As it always appears, the world of online payments looks very simple from outside. Everyone is so occupied in the daily rituals that they hardly give any attention to the glossary of the payments gateway. A full cycle of online payments from initiation to completion involves lots of happening in the background. There are numerous terms and phrases one may have never heard of. For many retailers, it gets awful because the best payment gateway comes with a wide array of jargon and technical terms. It is a human psyche to focus only on the end outcomes and ignoring the technicality which facilitated the required process. Nevertheless, life is a continuous process of learning, it’s never too late to learn new things. Here is an essential glossary of key terms you should know and comprehend the fundamental working payment gateway:
It is a financial institution that facilitates debit and credit payments on behalf of the merchant. It allows you to make a financial transaction through the gateway you appoint.
It is the financial institution that issues debit or credit cards directly to customers. You can simply identify your issuing bank by just looking at your debit or credit card.
Merchant / Merchant Account
The merchant or retailer is someone who provides products and services. A merchant account is simply a merchant’s bank account where the intended funds are deposited.
Chargebacks are simply ‘refunds’ made to the consumer due to a fraudulent transaction or disputed transaction. This mostly happens in case of an unsuccessful or failed transaction.
The customer is provided with numerous options to facilitate online payment such as credit card, debit card, UPI ( Unified Payment Interface), e-wallets, etc. The gateway brings all the requisite payment options to a single place during checkout. All these integrated payments options are called the payment method.
Authentication and Authorization
Authentication is a process of validating the identity of the individual making payment. It is also referred to as CVM (Cardholder Verification Method), which can be done through biometric, 3D secure number, OTP, CVV number, PIN and signatures. The following step once the payment is verified, it is further sent to the customer’s bank via the interchange network to proceed for the final payment. Depending on the balance in the account, the payment is authorised.
It is the process that ensures payments made to a merchant account ultimately ends up in the intended merchant’s bank account.
It is a secure payment method using a credit or debit card, or another payment tool using NFC and RFID technology.
PSS DSS Compliant Standard
The Payment Card Industry Data Security Standards (PSS DSS) is an integrated set of security standards for an organisation that regulates branded debit or credit card. It protects the relevant data of the cardholder from any kind of infringement or online payment forgeries.
Thereafter, do not let your less knowledge of key payment gateway terms act as an impediment to running a successful online business and retail payments. There is a famous saying ” the more you learn, the more you earn”. Now that you know some key terms that are routinely used in the payment gateway business, it will definitely assist you in choosing the right payment gateway provider to ensure smooth transactions. One of the best payment gateway service providers is Cashfree. You can check their services at – https://www.cashfree.com/payment-gateway-india.