End Customer Flow

The payment gateway process kicks off when a customer orders a product from a payment gateway-
enabled merchant. The payment gateway performs a variety of tasks to process the transaction.

1. A Customer places an order

Either by clicking ‘Buy’ or an equivalent option or by entering the card details on the merchant website
or application.

2. Encryption of information and forwarding to Merchant’s Site

If the order is via a website, the customer’s web browser encrypts the information to be sent to the
merchant’s web server. And in other cases, this is done via the Secure Socket Layer (SSL).

3. Forwarding Information from Merchant’s Site to the Payment Gateway

This is an SSL encrypted connection from the merchant’s server site to the payment server hosted by the
payment gateway.

4. Payment gateway sends transaction information to the Payment Processor used by the Merchant’s
Acquiring Bank
5. Payment processor forwards transaction Information to the Card Association

The card association also acts like the issuing bank and directly provides a response of approval or
declination to the payment gateway.

6. The card association receives the authorization request, verifies the request and sends a response
back to the processor..

It conveys the success or failure of the request as well as the reason.

7. Payment processor forwards this information to the Payment Gateway.

8. Payment gateway forwards it to the Merchant Website.

This process is known as Authorization and it takes about 2-3 seconds, altogether. The merchant then
fulfills the order and the above process can be repeated.

9. At the end of the day, the payment gateway performs a process known as settling.

During which it groups all your transactions together and sends them off to the Merchant’s Acquiring
Bank in a single batch via the Processor for Settlement.

10. Payment gateways also record your transactions and allow you to view them using the payment
gateway report facilities. This completes a single payment gateway process