What is a Payment gateway ?

A payment gateway is a technology platform that provides a secure and encrypted connection between an e-commerce website and a financial institution, facilitating online transactions by securely transmitting transaction data. It acts as an intermediary between a merchant website and a customer's payment method, enabling the customer to make online purchases, and the merchant to receive payment for those purchases. Payment gateways can process various payment types, including credit card, debit card, net banking, and mobile payments.

There are two main types of payment gateways:

1. Hosted Payment Gateway: In a hosted payment gateway, the payment process is handled on a secure payment gateway server, and the customer is redirected to the gateway's website to complete the transaction.

• Redirect Model: In this model, the customer is redirected from the merchant's website to the payment gateway's website to complete the transaction. The customer enters their payment information on the payment gateway's secure site and the transaction is processed.

• There are several types of Redirect Model Payments, including:

  1. Online Credit Card Payments: Customers enter their credit card information on the payment processor's website to make a payment.

  2. E-wallets: Customers use their electronic wallet to make a payment.

  3. Direct Debit Payments: Customers provide their bank account information on the payment processor's website to authorize a direct debit from their account.

  4. Online Bank Transfers: Customers are redirected to their online banking site to complete a transfer from their bank account to the merchant.

  5. Mobile Payments: Customers use their mobile device to make a payment, either through a mobile app or by texting a payment to a designated number.

  6. Alternative Payments: Customers use alternative payment methods such as PayPal, Apple Pay, or Google Pay to make a payment

• Iframe Model: In this model, the payment form is embedded within an iframe on the merchant's website, providing a seamless experience for the customer. The customer's payment information is securely transmitted to the payment gateway for processing.

• Lightbox Model: In this model, a pop-up window opens on the merchant's website, allowing the customer to enter their payment information without leaving the merchant's site. The payment information is transmitted to the payment gateway for processing.

1. Integrated Payment Gateway: In an integrated payment gateway, the payment process is integrated into the merchant's website, and the customer remains on the merchant's site to complete the transaction. The payment information is securely transmitted to the payment gateway for processing.

• API Integration: In this model, the payment gateway provides an API that allows the merchant to integrate the payment process into their website. The customer's payment information is transmitted directly from the merchant's site to the payment gateway for processing.

• Direct Post Method: In this model, the payment gateway provides a form that is posted directly from the merchant's website to the payment gateway for processing. The customer's payment information is transmitted directly to the payment gateway, reducing the risk of data interception during transit.

• Transparent Redirect: In this model, the customer's payment information is collected on the merchant's website and securely transmitted to the payment gateway for processing. The customer remains on the merchant's site throughout the transaction.

Both types of payment gateways provide secure and encrypted transactions, but the level of customization and control over the payment process may differ between the two