Canadian Payment Gateways: How they Work
As a Canadian company that wants to set up and enquire about Canadian payment gateways, you have come to the right place if you want to know how they work. Payment gateways authorize payment, like a traditional credit card terminal, but these gateways work wirelessly and on the internet instead of hardwired systems that require additional telephone lines in order to send and receive information. Canadian payment gateways encrypt all of the sensitive credit card information and make sure that secure transactions are always a priority.
Canadian payment gateways work by transferring information from a portal, like a website or phone, to a processor or merchant bank. In order to process the transaction, however, several steps must take place. The first step, of course, involves your customer placing an order. When they order via your website, for instance, when they hit “submit payment”, the process begins with encrypting the information immediately by the web browser before it is sent to your merchant web server.
The information will be encrypted again as it goes from the web server to the payment gateway. From there the encrypted information goes to the payment processor from the acquiring Canadian bank. When it gets through this step, it is sent to the association, or brand, like VISA, MasterCard, etc. At this point, the final authorization of acceptance or denial is given and the process begins to go back to the place of origin with a response code. This code is used to tell the receiving computer if the transaction is accepted or declined and possibly the reason for declining the transaction, if such is the case.
This information is sent back to the payment gateway in question and from there the encrypted information is sent to the website where it is unencrypted and displayed to the cardholder that payment has gone through. The merchant will additionally be notified of the transaction. The entire process for Canadian payment gateways takes about 2-3 seconds on average.
When the merchant is notified that a transaction has taken place, they will be able to save up the transactions and submit the information to their merchant bank in a batch. Some companies send the batch daily, others weekly, depending on the amount of transactions they do. Once the batch is sent and approved, it usually takes less than three days for the money to be submitted to the merchant’s bank account.
In addition to the above steps, many Canadian payment gateways have additional fraud and security features attached to them that screen each transaction. Usually the merchant will have to approve all of the payments by batch, before setting up everything to go through to the merchant bank. All of these tools can work together to not only make your experience better, but also your customer’s.
When looking for and considering Canadian payment gateways, always read consumer reviews and check out and compare prices in order to ensure you are getting a good deal. Asking people you know who use them can be a great way to find the best gateway for your business.
