The traditional online payment acceptance requires merchants to opt for a merchant account and payment gateway, but in the new era of technology, both of these things don’t matter anymore.
What is a payment gateway?
A payment gateway is an essential entity for accepting online payments. It enables online payment acceptance by approving the transaction process between merchant and customer.
In addition, it also encrypts the sensitive card details and sends the data to the processor for further proceedings.
How does a payment gateway work?
It facilitates the online transaction by transferring the information between the payment portal and the acquiring bank.
Three main components make up how a payment gateway functions:
- The web portal sends payment details to the payment gateway.
- The payment gateway encrypts the details and sends a request to the customer’s bank for authorization.
- Based on the status of the payment, i.e. success or failure the customer’s bank transfers the amount/funds to the merchant.
For detailed working – read here
What is a merchant account?
If you want to accept online business, you had to have a merchant account.
The merchant account receives the money from an online transaction.
The acquiring bank maintains the merchant account.
Once the user has successfully completed their first online transaction and the issuing bank and card network have performed the relevant checks.
However, The merchant account is where the transaction funds are kept till they are fully authorized and verified.
After the successful transaction, Money is moved from the merchant account to the business account.
For detailed information read here
Therefore, the conventional online payment is as follows:
But can make the following adjustment
Lyra’s robust and seamless payment solutions help businesses to put their entire emphasis on managing only business-related operations as Lyra takes over your major responsibility of managing online transactions for your business on an everyday basis.