Hi,this is vamshi.Can u please explain me the functionality of payment gateways in the e-commerce applications. and
What is merchent management system. I thought the transactions between user and merchent can done through this system.but i dont know exactly please help me.
A payment gateway facilitates the transaction between the merchant and the credit card company.
It's like this, there are millions of merchants online, but only a handful of payment gateways. By restricting their communication to these payment gateways, the credit card companies limit their risk by reducing the sources of potential failure. Generally, these transactions are authenticated immediately, and a hold is placed on the credit card, but the transactions themselves are run in a batch at the end of the day, at which time the processor finalizes all transactions with the credit card companies.
I'm sure there must be merhants who communicate directly with the credit card companys, but I have yet to see one myself.