A payment gateway integration service is nothing but a medium or platform of a merchant service that authorises payment with various options such as debit cards or credit cards, digital wallets, UPI and so on to the online retailor like, eCommerce, SaaS, business, and many more. If we search in Google, we may find many payment gateways out there as the digital marketing has great craze in this Twenty First century and cashless transactions has now become a new trend. Hence, whenever we are making an online transaction a Payment Gateway plays a major role in this process.

Hence, we need to know how a payment gateway integration service works but before that we need to know about the various software involves whenever we are making a card-based transaction. The software components of a payment gateway are Issuer Domain-Access Control Server (ACS), Interoperability Domain-Directory Server (DS), The Acquiring Domain-Merchant Plug-In (MPI), Payment Switch. Let us discuss what these are actually:

Issuer Domain-Access Control Server (ACS): This is the place where the issuing bank operates. The issuing bank provides the card to the card holder who makes the transaction. The issuing bank installs a server which is known as Access Control Server and it is used to accept 3D messages and then process the messages and authenticate the card user and the transaction.

Interoperability Domain-Directory Server (DS): This also known as the foundation holder which holds the 3D secure mechanism together. The Directory server within it, is installed by the card network. This called a directory server because it serves as the directory between the acquiring bank and the issuing bank. The server also serves as a mapping server where the acquiring bank sends a message to the card network’s Directory Server. After that the Directory Server will receive the message from Merchant Plug-in (MPI) and then checks the card number against the BIN range directory. After that the message is forwarded to the definite issuing bank and then the issuing bank will proceed and validates the card user.

The Acquiring Domain-Merchant Plug-In (MPI): It is the place where the acquiring bank and the payment gateway sits together. They initiate the transaction and to make this happen entities in acquiring space need to install a “merchant plug-in” (MPI).

Payment Switch: Payment switch is the independent entity that simplifies the communication between various entities during a payment process. The payment gateway communicates with various stakeholders during a payment processing. It enables the processing of original payments between providers and also accept the request of payment that is why it is considered as highly reliable, and versatile and it can perform billions of payments daily. payment gateway integration service also makes out about which providers to deal with and then formats the message for that provider and gets a response and then changes the response to a generic format and then sends back the response to the caller.

These are the software’s activity involves for making a payment through a payment gateway. Now we have to make out about the process of making the transaction. It includes a several process and they are:

1.Card Authentication: The most important task for making a transaction is to authenticate the card holder’s account number and also checks if it is the issuer’s card and that is in the 3D secure platform. Then the merchant server software connects with the card network. These are the process that involves in a card authentication.

2.Payer Authorisation: After the card verification process it involves in the 3D Secure programme. The payer authentication request or response are sent form the merchant-plug in to the access control server to begin the actual authentication. At this point the card holder’s CVV will be verified. Then the Access Control Server will begin authentication and if the authentication becomes successful then it will provide an Account Holder Authentication Value (AVV). For having a successful authenticated transaction, the Account Holder Authentication Value must be sent to the acquirer by the merchant and then it is forwarded to the issuer as the part of that authorisation request. The ACS provider should generate AAV values for all attempts like when the cardholder is not enrolled or declines activation (PARes=A) and when it is fully authenticated (PARes=Y) transaction status. After all these steps are completed then the payment authorisation begins. The merchant then sends a request to the acquirer. The acquirer then submits the request to the card issuing party-account holder’s bank. Then the issuer checks the request and takes the decision if there are enough funds to make the transaction. If there are sufficient funds then the authorisation is made and the funds are deducted and the transaction code is then shared with the MPI.

What is Capture in Payment gateway integration service?

This is the most important part of transaction via a payment gateway. It happens after the successful payment authorisation when the authorised money is transferred from the customer’s account to the merchant’s account and transaction amount will not delivered until the funds are captured. The card network then tells the MPI that the card is authorised and after that the customer’s money is transferred from the customer’s account to the merchant account. Usually, this capture process takes near about 3-4 days to fully complete it and this is for the debit cards. But if we use the credit card then it will take near about 4-28 days to complete it.

But the transactional capture takes place in two ways and they are:

Automatically: This takes place when the card capture is automatically sent by the merchant’s acquiring bank on behalf of the merchant and that omits the process of manually putting in a request for fund capture and the funds are immediately captured after the authorisation happens.

Delayed: The merchant has the option for deciding when the funds will be transferred to his or her account. If the request is not sent under the authorisation period then authorisation will expire and capture fails and this matter is very common for PayPal, here the money will only be received after the customer receives their goods or services.