What Are Payment Gateways?
Payment gateways are an integral aspect of processing credit card and debit card payments securely online these days. The key goal is to get the information from point A (the vendor accepting the card payment) to point B (the processor receiving the information), and so on.
To do this, a payment gateway is utilized. Let’s use a quick example to add some clarity to this.
To do this, a payment gateway is utilized. Let’s use a quick example to add some clarity to this.
- Joe decides to buy a tie online.
- He finds a store and adds it to shopping cart and checks-out.
- Joe enters his credit card information into the online shopping cart.
- The payment gateway encrypts the data to prevent thieves from stealing it.
- The information is sent to the processor to get an authorization.
- The processor sends the information to the acquiring bank to get a confirmation.
- This info is then sent to the Card Association and issuing bank for approval.
- An authorization code is sent back to the processor and then to the vendor.
- The transaction is complete for Joe.
- The vendor will submit the batch approval codes later on, and get payment from the issuing bank, via a similar process.
A payment gateway integration in Java would be tasked with assuring that the information that Joe sends, from his card, when it was either entered online or swiped, was secure from start to finish. This helps prevent fraud, which saves Joe, the vendor and the banks a lot of time and money.
Billions of dollars are lost due to fraudulent transactions each year. The credit card industry has to eat these costs, offering fraud protection to entice consumers. But these costs ultimately will factor into the fees they charge, the associated interchange fees, fees the processor charges and what the vendor ends up charging guys like Joe.
With built-in fraud protection, these losses can be reduced and minimized. While there’s never a surefire or full-proof method to entirely defeat or prevent fraud, securing this vital information is a powerful step in the right direction. It helps keep Joe’s info safe, and it helps keep the cost of accepting credit cards feasible for vendors.
Billions of dollars are lost due to fraudulent transactions each year. The credit card industry has to eat these costs, offering fraud protection to entice consumers. But these costs ultimately will factor into the fees they charge, the associated interchange fees, fees the processor charges and what the vendor ends up charging guys like Joe.
With built-in fraud protection, these losses can be reduced and minimized. While there’s never a surefire or full-proof method to entirely defeat or prevent fraud, securing this vital information is a powerful step in the right direction. It helps keep Joe’s info safe, and it helps keep the cost of accepting credit cards feasible for vendors.
