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What you need to know about Payment Gateways and Processors

Steve Susina • May 30, 2013

A lot of questions come up during ecommerce architecture and design sessions about payment gateways and payment processors. Payment gateways are integrated with the ecommerce platform typically via Application Programming Interfaces (API’s) or through hosted payment pages. The payment gateway receives the credit card authorization and sales/capture requests from the ecommerce platform and it sends them to the payment processor for settlement. Authorization requests put a hold for a specific amount of funds on a credit card. If the authorization is successful then the payment gateway guarantees that a charge can be captured for some specific period of time (typically somewhere between 3-30 days). 

 

Payment gateways all have different limitations for how long an authorization will guarantee funds and for what period of time you can capture charges against a token. This will also vary depending on which payment processor you are working with via the payment gateway. Payment processors have their own sets of limitations and they don’t work with all payment gateways.

 

Regardless of which payment gateway you use, the original authorization will practically always expire after 30 days, so if you have any products on a backorder that will last longer than that period of time you’d need to devise a way of reauthorizing your backorder.

 

The additional details which can limit your choices for payment gateways and processors are whether an order may require multiple shipments either due to multiple warehouse locations or because you may sell products that are backordered. If you do require multiple shipments per order and you want to capture charges for each shipment you will need a payment gateway/processor combination that supports authorizing the credit card for the full order and then capturing charges against that token multiple times.

 

Sounds complicated? It can be, that’s where we come in to help our clients navigate through all these details so the complete ecommerce system is architected so it works properly.


Steve Susina

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Steve Susina

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