How digital payment works?
The need to understand backend working of digital payments is necessary as these make you believe that the process is very rigid and secure in its actions. The digital payment system has become more of a necessity than just need for several business firms to participate in a better and faster profit making. This system facilitates working upon Electronic Data Interchange (EDI), and has gained more popularity because of the vast use for shopping and transaction purposes. The digital payment could include variety of ways for proceeding with your transactions. It could be the credit card banking, net banking, or banking through digital wallets on payment gateway applications.
- Have a read upon a few security measures that are taken up by digital payment companies or gateways who give the service of being an intermediate platform for the successful digital transaction-
- For the digital payment of services, when using a credit card, it gives security in form of Card Verification Number (CVN) that detect any fraud activity within the transaction process by comparing the verification number at back of the card with that of the customer’s file in Bank.
- The merchants that enable these digital payments, also have to take care of all the security protocols involved.
- Some leading companies that provide these online financial transactions, make use of strong and smart tools to take care of not risking user’s bank account data.
- The life cycle of digital payment goes in the following form-
- Client requests the merchant to authorize and initiate the payment process through a gateway that user is working on.
- The merchant checks details to confirm if the transaction can take place with the details that have been provided or not.
- The card expiry date, pin code, and user details are matched and presented to the customer.
- Once the authorization process gets completed, payment gateway will receive a settlement request from merchant regarding the action of adding, transferring or removing balance from the original account.
- This request could get completed just after authorization, or may take time to get performed.
- The digital payment through net banking and cards is almost similar as it involves redirecting the user to the merchant for the completion of payment.
- If the digital payment is a transfer of money through e-wallets, then, there is a direct connection among the receiver and sender, and the electronic form of money gets exchanged within seconds with no boundaries of distance.
The transfer through digital wallets sometimes put the users in danger when carelessly wrong contact number of the receiver is entered, and amount gets transacted to somebody else.
Digital payment system also takes into consideration, the transfer of money from a bank account to the digital wallet. These wallets use online transaction processing systems to read and update user’s data of maintaining a wallet with right security measures for each possible case. The encrypted from of data carries information related to bank details, so that it is invisible to thefts or malware attacks who could attempt to steal it.
The working of digital payment gateways is simple, yet strongly configured. Some best payment gateway companies hold paramount results in customer participation, and continuously grow because of the services that they provide.