What exactly is the payment gateway mentioned in the payment process?

Mar 04 - 2022

What exactly is the payment gateway mentioned in the payment process?

1. Definition of payment gateway

When it comes to payment gateways, first we need to understand the definition of gateways. The interrelation function of the gateway is to realize the communication link between the networks, including two basic functions: network connection and protocol simplification. Similarly, credit card payment gateway,the payment module in the merchant business system realizes the link between the merchant business system and the bank payment system, plays a similar role, and can be regarded as a gateway. Therefore, the payment gateway design we are going to talk about today is actually the design of the payment financial sector of the merchant business system.

2. The origin of payment gateway

Before the popularity of electronic payment, merchants supporting banks connected to the system interface provided by the bank. Then, as the payment industry continues to grow, merchants are no longer satisfied with supporting just one or two banks in the payment chain. At this point, the merchant's payment system needs to be connected to multiple banks and deal with the many issues arising therefrom, such as account reconciliation, settlement, etc. Moreover, the labor cost and time cost development required for such a system are accepted by the merchants.

At this time, professional third-party payment institutions were born. They developed and operated a management system to replace the merchants to achieve more than 100 functions of connecting multiple banking systems at the same time, and then provide them to merchants through a unified interface. Therefore, at this stage, the system of the third-party payment institution of the management system is the payment gateway.

The basic functions of the payment gateway not only realize the connection between the merchant's business system and the banking system, but also include many basic functions related to payment services. Including order management, channel management, risk control management, path configuration, account management, liquidation management, merchant management, user management, etc.

With the continuous development of the online payment industry, there are more and more third-party payment institutions. At this time, the problem that stores need to solve is no longer how to connect to multiple banks, but how to connect multiple payment institutions online. At this time, the merchant's demand for the payment system has also changed, and the position of the gateway has moved further forward, which puts forward higher requirements for the merchant's payment system.

From the merchant's point of view, the difference between payment gateways and traditional payment gateways at this time is that people pay less attention, and merchants only need to focus on orders, channels, risk control, accounting management and routing configuration.