What is Payment Processing Speed? Definition & Meaning - Ikajo Glossary


Payment Processing Speed

Payment processing speed is an amount of time involved in receiving a response from the API call to the payment gateway. The entire transaction usually takes no longer than a few seconds.

How the payment gateway processes the payment?

  1. The customer makes an order on the merchant’s website.
  2. The merchant receives the client’s credit card information.
  3. A payment gateway sends an authorization request to the acquiring bank.
  4. If the card is 3DSecure, the system will redirect the user to a page where he is to enter the password. Then, the issuing bank checks and verifies the password. In case of successful verification, the latter sends a confirmation to IPS.
  5. The system redirects the information from the IPS to the acquiring bank.
  6. A payment gateway sends a request to the acquiring bank to subtract the order amount
  7. Acquiring bank redirects it to the IPS and the issuing bank.
  8. Issuing checks the user’s balance on the card in question. If there are enough funds, the issuing bank conducts transfer and sends confirmation of the transaction to IPS.
  9. IPS confirms the transaction to the acquiring bank.
  10. The acquiring bank returns it to the payment gateway.
  11. Finally, the merchant finds out about a successful transaction.
  12. Next, an immediate crediting of cardholder’s account in the merchant’s system takes place.

Once again, the entire process takes no longer than a few seconds.

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