How a payment gateway works on a Magento website

Are you planning to open an online store, but are worried about the security of the payment method? Dispelling ignorance is the key to being more confident about stepping into the business of ecommerce.

How a payment gateway on a Magento website works

An online store’s payment gateway acts as an intermediary between your company and the connected bank. This payment gateway is aimed at generating smooth transactions between customer and your bank, and also to maintain secure payments. Therefore, the payment gateways installed by Magento ecommerce developers are created to preserve a customer’s privacy.

Let’s look at the steps involved in the working of a payment gateway.

Step 1: A customer chooses the products they want to buy and adds their bank account details while checking out. The information the customer provides is encrypted and forwarded to the payment gateway.

Step 2: Once the payment gateway receives the order, it authenticates the online store with a digital certificate. At this stage, the customer is shown a list of payment options that they can choose to make a payment. Then the payment gateway sends the details to the acquiring bank or merchant account.

Step 3: While the bank or credit card attempts to authenticate the payment transfer, the transaction will either get approved or declined. This process is based on the money available in the customer’s account.

Step 4: The final stage involves the customer’s bank sending this money to the payment gateway. The payment gateway then redirects this processed payment to the merchant account. Sometimes, depending on the payment gateway, some transactions take a few minutes to a few days for the money to appear in the merchant’s account.

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