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Important Payment Gateway Terms – Part 1

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sahil verma @sahil_verma2 · Oct 26, 2021

Accepting the best payment gateway solutions in India is a must in today's world, but many people find it difficult to get started due to a lack of awareness. And if you have some experience, you can be unaware of a lot of things.

This is the first section, and it will greatly assist you in understanding payment gateway use, security, functionality, and technological aspects.

  1. 3D Secure / 2 factor authentication

The extra layer of encryption introduced in an online purchase is referred to as 3D secure authentication. As a protection precaution, while paying online, an SMS with the OTP is sent. This is often referred to as two-factor authentication.

The security mechanisms require two levels, which is why it is called two-factor authentication. The customer enters the card info, such as cardholder name, card number, CVV, username, and password, in the first step, and the OTP is collected on the registered mobile number in the second step.

  1. Acquiring Bank

This is the merchant bank where the first internet orders are received. Settlements are credited to the merchant's account by the receiving bank.

The purchasing bank maintains the merchant's account in order to receive consumer payments through payment solutions in India.

  1. API

API is an abbreviation for Application Programming Interface. It facilitates the terms of communication between the two applications. It takes the shape of a binding bond between them.

  1. Authentication

An authentication mechanism is used to verify the identity of the individual who initiated the online payment. The payer is expected to enter the information listed in Term 1.

  1. Authorization

When an online transfer is initiated, the payment gateway sends an authorization request to the customer's bank.

If the customer's bank authorizes the transaction, it is successful; otherwise, it is failed. The loss may be attributed to a lack of balance or security concerns.

  1. Bank Identification Number

This number is important in online payments for a variety of purposes. The BIN is the first 6 to 8 digits of the card number. It is useful for identifying the transaction and its sources, as well as for authorization, sorting, and clearing.

  1. Business Days

A trading day is often referred to as a working day. Bank/public holidays, the second and fourth Saturdays of the month, and all Sundays will not be considered working days.

This term is often used in reference to villages. However, it is also applicable when any online payment gateway-related operation is performed on a working day.

  1. Capture

The approved sum is moved from the customer's bank to the purchasing bank. The merchant must catch these discoveries as a kind of acknowledgment for obtaining the volume. Capture can be done manually or automatically.

  1. Chargeback

Chargeback occurs when a client files a lawsuit with his bank over a card purchase.

  1. Chargeback Minimization

Measures taken by the retailer and payment gateway will aid in the reduction of all forms of chargebacks – fake and real.

  1. Chargeback Reason Code

This form of code assists payment and financial institutions in determining the cause for a chargeback.

  1. Customer

A buyer or recipient is someone who buys a product or service and initiates an online purchase using one of the available payment mechanisms to complete the transaction.

  1. Electronic Funds Transfer

Electronic money transfer refers to the ability to transfer funds using online payment systems. For example NEFT, RTGS, IMPS, UPI, etc.

  1. Fraud Prevention

Fraud Prevention Mechanisms are the measures or processes in place to deter fraud by merchants or consumers. This will include things like KYC, transaction management, risk estimation, and so on.

  1. High-Risk Business

High-risk companies include those with a high number of chargebacks, high-risk corporate practices, and so on.

  1. ICO

The term "Initial Coin Offering" refers to the process of collecting funds in order to launch a new cryptocurrency. It is comparable to an IPO (Initial Public Offering). When a new corporation becomes public, it raises funds from an IPO.

  1. Integration

In layman's terms, integration involves incorporating a payment portal to a website or smartphone device.

Payment Service Providers have ready Plugins and SDKs for different platforms, making it very simple for merchants since no complicated coding is needed.

  1. International Bank Account Number

In foreign settlements, the word IBAN is used.

  1. Issuing bank

The account from which the invoice is accepted and withdrawn is held by the customer's bank. It offers net banking and issues different forms of cards such as credit cards and debit cards. It offers a variety of other services, claims, and so on.

  1. KYC

Know Your Customer is a mechanism that verifies every applicant's information and records. This procedure is carried out by financial institutions, payment gateway/aggregators, and so on in order to check the merchant or the client. The KYC is a mechanism that verifies every applicant’s information and records