The payment gateway settlement is the process where the payment gateway proceeds to pay merchants for transactions processing performed during a specific period. This depends on the settlement cycle and each bank settlement period may differ from each other. For example, the payment gateway may perform payouts to merchants four days after the transaction was processed (T+4). The two fundamentals of this process are the following:
1. Transactions or online payment that the online customers/ cardholders perform.
2. Profit or return that the merchants/ website owners get following the transactions made by online users through their websites.
The payment gateway can be termed as the middleman or a platform which enables ecommerce merchants to received payments from their online customers, validates the transaction and route the transaction to the bank and ensure that the merchants receive the funds/ payment. The payment gateway will create and provide merchants with a merchant account, then the merchant can start processing through their website.
There is the difference between the merchants’ bank account and the merchant account. The merchant account is the portal for the online trading services or the platform through which the merchants will be able to connect their website to the payment gateway and in turn the payment gateway is integrated to the acquiring banks.
This process accomplishes the following steps:
1. Cardholder inserts card details or the bank details on the checkout page of the website/ merchant.
2. After the merchant’s verification, the money gets shifted to the business, and the customer gets a confirmatory notification.
If the customer does not have enough service hiring amounts, or card information was wrongly provided, then the online payment gets automatically rejected. Still, he will receive a notification for disapproval of that service.
3. Once the purchase was approved, the funds shift from the cardholder’s credit or debit card and is channeled through the payment gateway to the bank acquiring bank.
4. The acquiring bank then communicates with the Card networks (Visa, MasterCard, Amex, JCB or others) and the Issuing bank, so as to complete the transaction.
5. Once this process completed, the Payment gateway receives the settled funds in their bank account and they can now proceed with merchant statement generation and settlement of funds.
Deciding on the payment gateway to partner with is a major challenge, that is why our online payment system is designed to help e-commerce merchants swiftly accept secure online payments, with multi-currency payment gateway options and offers complete end-to-end secure online payment processing solutions available to merchants to minimize risk in a card-not-present environment.