6 Steps Of Transaction Flow For Payment Systems In E-Commerce
ECommerce cannot function without payment. You can give your consumers a fast and safe shopping experience by using simplified eCommerce payment processing. This will assist you in cutting expenses, lowering cart abandonment rates, and enhancing customer satisfaction. In this article, you will come to know the different steps of cash flow for payment systems for e-commerce.
What Is a Payment System For Ecommerce?
The prevalence of online banking and shopping has led to an increase in the use of eCommerce payment processing. It entails receiving payments made via electronic means for purchases made online. The goal should be to create the online checkout process as simple as feasible while ensuring safe financial transactions, even though each eCommerce firm is unique.
Parts Of Payment System For Ecommerce
Processing payments for online purchases entails three parts, including:
- Payment gateway – Customer payments for online purchases can be made using a payment gateway, which is an online payment service linked to the eCommerce platform.
- Payment processor – A payment processor is a business that interacts with clients and deposits funds into your merchant account on their behalf.
- Merchants accounts – Your bank is communicated with through the gateway. With a direct connection to the merchant account, the store’s gateway charges the customer’s payment information.
Features of Payment System For Ecommerce You Need
In the next five years, Indian eCommerce is expected to increase 10 times, predicts a research study. To be accurate, up to 20 billion USD by 2025. It comes as no surprise that to satisfy our demands in the future, our payment methods must be equally sophisticated and cutting-edge. Here are a few characteristics that a payment system for ecommerce must have.
- Various types of the payment system for e-commerce
- Worldwide payments system
- Prominent methods of payment
- Purchaser commissions
- Recurring bill
- Account verification for banks
- Sub trader account
- Speedy resolution
- Simple integration and onboarding
- Refunds for online shopping
- Financial analytics
- Quick settlements
6 Steps Of Transaction Flow For Payment System For Ecommerce
Here are the 6 steps for transaction flow for a payment system for E-commerce –
Step 1. The customer completed their purchase and went to the checkout. A hosted payment gateway or a standalone payment gateway are both options for the merchant. They submit their financial information. These might include card information, VPA in UPI, net banking information, etc.
Step 2. It’s crucial to remember that the payment may have been made through a QR code, a payment link, UPI, or any other method. The transactional flows are unchanged. This data is securely gathered by the payment gateway and sent to the acquiring bank.
Step 3. After doing a fraud check, the acquiring bank submits the results to the card company. (American Express, MasterCard, and Visa) Based on these criteria, the card company either approves or declines the transaction:
Information Specifications: Details like the PIN, password, CVV, etc. of the client
Inherence Parameters: OTPs, biometrics, or codes for two-factor authentication
Cheques, account numbers, actual cards, etc. are examples of possession parameters.
Step 4. After receiving approval from the card company, the data is sent to the Issuer (the customer’s bank). The Issuer examines the account’s balance and conducts an authentication procedure.
Step 5. The transaction is then either approved or rejected via the same path. Issuer > Card issuers > Acquirer > Payment Gateway > Merchant > Client.
Step 6. Following acceptance of the payment status, the acquirer contacts the issuer to seek money. The money is then settled within this time range.
Category Of Payment System For Ecommerce
In eCommerce, there are several payment systems. Make sure each one is available through your payment gateway. These are the several payment methods you can need when taking payments for your online store.
- Hosted Payment Gateway – This sends clients to the webpage of the payment service provider (PSP).
- Self Hosted Payment Gateway – On your website, Self Hosted Payment Gateway merchants get transaction information.
- Off-Website – Vendors take payments outside of the website.
The Indian eCommerce market is thriving, to put it mildly. Despite the epidemic, all of this is happening – perhaps as a result of it. Whatever the circumstance, this expanding eCommerce sector needs well-equipped payment systems to operate. And now that you have acquired some major insights into it, you can navigate through it in a better manner.