Learn the Typical Transaction Process for a Payment Gateway

Learn more about what happens when a customer swipes their card at a credit machine.

online-payment-tabletWhen you want to process a payment, you swipe a card and you’re done. That’s not what’s really happening, as you might have guessed. There is a lot going on behind the scenes.

Look closely at the credit card swipe machine and you’ll notice that there are CAT5 cables that are hooked into it. These cables allow the processor to talk to the customer’s bank, and the bank of the retailer. That communication is essential, and it works a lot like a gateway.

In fact, it’s actually called a payment gateway, and it’s used to funnel the financial data from one bank to another. Of course, any long road has dangers along the way. For banks, those dangers take the form of hackers who siphon information from users as they transmit data. In order to secure that data, these gateways often encrypt it.

Using Secured Sockets Layer (SSL) encryption, gateways are able to mask the identities of the participants in a transaction. Without this information, it would be difficult to give or receive money. You wouldn’t know where to look for the money you’re supposed to take, or who to give the money you’re paying.

Credit card processing services are responsible for getting that information to the banks,  receiving the authorization and transmitting that approval to the retailer. All of this happens in seconds, which is crucial if retail is to remain competitive with the instant fulfillment of online shopping.


Charge.com Payment Solutions, Inc. has more than 20 years of experience in credit card processing services, and remains one of the most efficient methods to move money online.