How an Internet Credit Card Payment Gateway Works

1. First an online customer finds the merchant's website and adds products to a shopping cart. When they are done they will check out and enter their billing information. If the merchant does not have a secure page, the customer can be transferred to a secure payment gateway. If the merchant does have a secure site, the information will then be "passed" to the payment gateway without the customer ever having to leave the merchant's site.
2. Once the customers billing information has been entered in to the payment gateway it is then electronically transmitted to the processor.
3. The processor will pass the information from the payment gateway onto the bank that issued the credit card. The issuing bank will verify the validity of the card and check to make sure that the requested amount is available on the card. The bank will then set aside the amount of the purchase for the merchant and send the processor back either an approval number or a decline message.
4. In approximately 3-15 seconds from the time that the customer entered their information the approval number or decline message will be sent back to the payment gateway.
5. The payment gateway will pass the approval code back to the merchant's site or if the merchant does not have a secure site it will give the customer their approval information. The merchant can also choose to have the payment gateway email the customer a payment receipt.
6. At this point final payment is secured and is deposited into the merchant's internet merchant account. It will typically take two business days from the time of the original transaction for the funds to reach the merchant's checking account.