What is the payment flow from beginning to end of an ecommerce transaction? This is the credit card processing payment flow for MOST but not all gateways.
- If ecommerce, the customer places an order. The ecommerce solution defines what data will be passed to the gateway. It uses an API to pass specified data to the gateway.
- The gateway receives the transaction information and securely passes it to the payment processor. Each gateway defines what data it will pass to the processor and it may collect more information than it passes. Each processor defines what information it will accept from a gateway. The API uses the approved data and data format. The gateway must be certified to connect to the processor via a rigorous approval process to ensure security. The gateway transaction file includes yes/no parameters that were predetermined at the account set up level. For example, the “zip code must match or decline the transaction”. The gateway may also kill the transaction before sending to the processor based on merchant risk parameters that were set up.
- The processor submits to credit card interchange network.
- The credit card interchange network routes the transaction to the customers credit card issuer.
- The credit card issuer approves or declines.
- The credit card interchange network relays the answer back to the processor.
- The processor records the transaction details and deposits funds in your account per your merchant account terms. It relays the results to the gateway.
- The gateway records the transaction results and passes it to the ecommerce solution, which then stores on the customer record. Again, the ecommerce solution defines which data it will accept from the gateway.
At the very beginning I noted the above applies for most but not all gateways. The exception is if the gateway is also a switch. In that case, the switch can bypass steps and go straight to the credit card issuer. This is more rare and none of the most popular gateways can do this.