An article on what a payment gateway is www.deekpay.com

What is a payment channel

payment channelIt refers to the path and way to carry out payment transactions. In modern society, with the development of e-commerce, people rely more and more on payment channels to carry out various payment operations, such as shopping, transferring money, recharging and so on. Payment channel is a bridge for the exchange of funds between merchants and consumers, and is also an indispensable part of commercial activities.

Take the e-commerce platform as an example generally speaking the main docking two types of channelstripartite paymentInstitutions, banks; three-party payment institutions is we are usually familiar with WeChat, Alipay and other three-party payment companies, etc., the bank is mainly a direct link channel for banks and enterprises to provide some funds for the platform to receive and pay for the solution.

Between the merchant and the three-party payment, there is a fourth party payment.quadripartite paymentas a response toThird party paymentsExpansion of platform services. Third-party payments are between banks and merchants, while fourth-party payments are between third-party payments and merchants, without the restrictions of a payment licensing licence.

Clearing agencies such as UnionPay and Netflix are mainly operating organisations that provide network payment clearing platforms for non-bank payment institutions, banks and others.

The central bank is the clearing centre, and the clearing centre is the bottom layer of all payment clearing services. Our daily frequent use of Alipay, WeChat's bank card payment (WeChat, Alipay's balance payment is an internal account payment belonging to the three-party payment, there is no actual clearing of the flow of funds, but the central bank's clearing centre).

How Payment Channels Work

When consumers make a payment at a merchant, they use some sort of payment instrument, such as a credit card, debit card, e-wallet, etc. Merchants use POS, online payment gateways or mobile payment apps to collect payment information from consumers and then send this information to the payment channel. The payment channel receives these messages and forwards them to the consumer's card-issuing bank or the issuer of the payment instrument. Upon receipt of the payment request, the issuer performs a risk assessment, and if the transaction is approved, the issuer returns the approval information to the payment channel, which then returns this information to the merchant, who in turn informs the consumer of the result.

As a bank, its payment channel is the central bank. As a third-party payment company, its payment channel is the bank, UnionPay.

For third-party payment companies, the role of the payment channel is even more important:

Firstly, the payment gateway is the core of the service. They connect merchants and banks through the payment gateway and help merchants to accept electronic payments so that they can collect service fees. Secondly, the quality of the payment channel directly affects the service quality of the third party payment company. If the payment channel fails or is delayed, it may affect consumers' payment experience and have an impact on the reputation of the third-party payment company. Finally, the security of the payment channel is an issue that third-party payment companies must focus on. They need to ensure the security of payment information during transmission to prevent it from being stolen or tampered with.

Basic characteristics of the payment channel

Here are three basic features of the payment channel:

Connectivity: The payment channel connects different participants, including banks, third-party payment companies, merchants, etc., allowing for the smooth transfer of funds from payer to payee. Security: Payment channels must ensure the security of funds, including the legality of transactions, data privacy and system stability. Within the channel, the fund information of all parties is highly sensitive, therefore, security is the key to the whole payment channel. Convenience: The payment channel should provide convenient and fast services to meet the needs of users. In terms of user experience, the payment channel should simplify the operation process as much as possible and improve the payment efficiency.

Payment channels are widely used in specific business scenarios. For example, on online shopping platforms, when users need to pay for goods after selecting them, the platform will transfer funds through the payment channel of third-party payment companies such as Alipay or WeChat. In addition, in O2O (online-to-offline) scenarios such as shared travelling, funds will also flow into the merchant's account through the payment channel after the user completes payment through the online platform.

In short, the payment channel is an important channel for the transfer of funds, and is the "blood vessel" connecting the various participants, which ensures the efficiency and security of currency circulation.

Payment channel application scenarios

Payment channels play an important role in various application scenarios. Here are a few common application scenarios:

Online shopping platform: On an online shopping platform, when users need to pay for goods after selecting them, the platform transfers funds through the payment channel of a third-party payment company such as Alipay or WeChat. The payment channel ensures the smooth transfer of funds from the user to the platform, merchants and other parties, guaranteeing the smooth progress of the transaction.

Shared travel: In O2O (online-to-offline) scenarios such as shared travel, after the user completes the payment through the online platform, the funds will also flow into the merchant's account through the payment channel. The payment channel plays the role of fund clearing and settlement here, ensuring the rights and interests of both parties to the transaction.

Cross-border payments: with the acceleration of globalisation and the development of e-commerceCross-border paymentsThere is a growing demand for Payment channels can connect banks, payment companies and other participants in different countries and regions to achieve fast, secure and convenient cross-border payments.

E-wallet: An e-wallet is a virtual currency storage and transaction tool that can be tied to a bank account or a third-party payment account. In an e-wallet scenario, a payment channel provides support for the transfer of funds between e-wallets, facilitating online spending and payments.

Mobile Payment: With the popularity of smartphones, mobile payment is becoming more and more popular. Payment channel can connect banks, payment companies, merchants and other participants to provide support for mobile payment, which guarantees the security and convenience of mobile payment.

How to interface with payment channels

Generally merchants apply for payment channel payment methods depending on the merchant's business platform.

For example, APP needs APP payment, or apply for H5 payment, which is the type that can be grafted onto the APP platform to achieve payment closure. There are other types of small programme payment, public number payment, H5 mall payment, PC website sweeping payment and so on.

The cost of each channel type is also different, in which the cost of offline scanning code payment is the lowest, distinguish the difference with the online and offline, the cost of online is relatively high, and online virtual types of products, such as game props, pay to read the cost of this type of the highest, but because of the cost of the profit of each platform is different, the payment channel fee is only a small part of the fee.

Who to request a payment gateway from

There are three general ways to apply for payment access:

To WeChat, Alipay official direct application for payment interface, in the open platform to submit the corresponding application materials, after passing the audit, under the merchant number, according to the open platform to provide the interface materials, the merchant number logo replaced with their own merchant number can be used. To the third-party payment company to apply for a payment interface, three-party payment companies have a payment licence issued by the central bank, the qualification of the funds settlement, the application process is basically about the same type, just each three-party payment company to support the system is different, the solution provided is also different. Apply to the fourth party aggregation service provider, the concept of the fourth party aggregation service provider is to have a membership certificate issued by the Association for Payment Clearing, filed in the central bank aggregation service provider. The fourth party aggregates the payment channels of multiple three-party payment companies and does fusion so that merchants can apply for docking with multiple payment companies at the same time, and can switch the payment channel to cope with the stoppage of business caused by the wind control that occurs during the operation of the merchant platform. The fourth party aggregation service provider does not provide funds settlement, all settlements are through the third-party payment company or bank, which ensures maximum security and compliance in this case.

Atpay - we are a professional provider of payment solutions and have been deeply involved for many years inIndia PaymentsWe have successfully provided payment functions for countless customers at home and abroad. We are fully confident in payment integration and high-risk payment processing, and welcome inquiries and exchanges.