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How Does the Payment System Work in an Online Store?

April 29, 2024

Payment systems and services for online stores play a key role in ensuring safe and efficient online transactions in e-commerce. Understanding the basic stages of their operation helps both buyers and store owners to make and accept payments without unnecessary difficulties. In this article, we will examine how the payment system works on a website and highlight its key features.

Primary Payment Methods

In the world of modern financial operations, there are numerous payment methods that provide convenience and security for both individuals and businesses. The main methods include:

  • Credit and debit cards;
  • Alternative payment systems;
  • Bank transfers;

Credit and debit cards are among the most common payment methods, playing an important role in transferring financial information between customers and payment systems. They are being used for instant transactions both in land-based stores and online.

Bank transfers is a traditional method of sending funds from one bank account to another. Depending on the destination of the transfer, the process may take several days and involve fees, but it remains one of the most reliable methods for funds transferring. At the same time, in Europe, the Payment Services Directive (PSD2) has revolutionized the field of bank payments, allowing users of online banking accounts to initiate payments and receive their bank statements seamlessly through software developed by authorized third parties (PISP and AISP).

Among other popular payment methods such alternative payment methods can be highlighted – electronic wallets, checks, vouchers, QR payments, SMS, and others. Each of these methods has its own featuresand is applicable depending on the specific needs and preferences of users.

Operation of Payment Gateways

Before choosing a gateway, it is recommended to understand how payments are made in online stores. The payment process begins when the buyer selects products or services in the online store and proceeds to checkout. When the buyer enters their payment card details or other payment information, this information is transmitted through a secure connection to the payment gateway. Then, the payment system encrypts this data to prevent theft or unauthorized access, and forwards it to the bank that issued the buyer’s card.

The bank verifies the data and approves or declines the transaction based on the availability of sufficient funds and other security factors. After that, the bank sends information about the transaction result back through the payment provider to the online store and the buyer eventually. If the transaction is approved, the online store can complete the order and provide the buyer with access to the purchased goods or services. Now you know how payment through the payment system works, which will allow you to select a suitable gateway and ensure profitable operation more accurately.

Risks and Security Measures

The use of a payment system in an online store is associated with a number of risks. Some of the most common types of risks during online payments include:

  • Fraud: Online stores may encounter fraud when perpetrators use stolen credit cards or other methods to make purchases.
  • Data security breach: Hackers may attempt to breach the store’s system to gain access to customers’ personal information, such as credit card numbers, which can lead to data theft.
  • Technical failures: Technical issues, such as payment processing failures or glitches in payment gateways, can result in order processing delays or even customer loss.

To protect against the risks mentioned above, it is important for internet stores to follow some basic security rules:

  • Use SSL encryption to protect personal information during data transmission over the internet.
  • Implement multi-factor authentication to confirm the customer’s identity when making payments.
  • Maintain up-to-date software and conduct regular security audits to detect and address vulnerabilities.
  • Regularly monitor transactions to detect suspicious activity and promptly respond to potential security threats.

An important aspect of payment gateway operation is ensuring security and data protection. They use encryption and other protection methods to prevent the leakage of confidential payment information. For card payments, international payment systems (like Visa and Mastercard) and the PCI DSS standard define the level of protection required for transactions.

Payment Gateway Operation Process using Oropay

If you are unsure which payment system to choose for your online store, consider Oropay. The popular payment provider Oropay offers comfortable and efficient methods for transaction processing, as well as quick service setup and integration. The technical interaction process of the OROPAY payment provider and the online store looks as follows:

  1. Payment acceptance on the website begins when the customer selects products or services in the online store and proceeds to make a purchase. When the customer is ready to make a payment, the online store generates a payment request.
  2. The generated payment request is sent to the Oropay payment gateway. It contains all the necessary payment data, such as the amount, currency, and information about chosen payment method.
  3. The Oropay payment system receives the request and starts the process of verifying and processing the payment, which also involves the issuing bank and the international payment system under which the card is issued. At this step, payment data is analyzed for authenticity, as well as checked for the availability of sufficient funds in the customer’s account or other financial restrictions.
  4. After verification, the payment provider sends the processing result back to the online store. If the payment is successful, the customer receives confirmation of the successful transaction. Otherwise, if the payment fails for any reason, the customer is also informed of the unsuccessful operation.

As a result of the efficient operation process of the Oropay payment gateway, customers and online stores are able to carry out transactions online with a high degree of safety and efficiency. This ensures a secure and streamlined experience for all parties involved in the transaction.

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+357 25 752 100
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Oro Pay Ltd (license number is authorized as an Electronic Money Institution under the Electronic Money Law of 2012 for the issuance of electronic money. OROPAY is a registered trademark/ brand name of Oro Pay Ltd. All rights reserved © Oro Pay Ltd 2023.
Oro Pay Ltd (license number is authorized as an Electronic Money Institution under the Electronic Money Law of 2012 for the issuance of electronic money. OROPAY is a registered trademark/ brand name of Oro Pay Ltd. All rights reserved © Oro Pay Ltd 2023.