Authorization Service

Payment authorization is a crucial step in ensuring secure and seamless transactions through a payment gateway. It involves verifying the validity of a payment method (such as credit card, debit card)and confirming whether sufficient funds are available to cover the transaction. This process protects both merchants and customers by reducing the risk of fraudulent transactions and ensuring that payments are processed efficiently.

Key Steps in Payment Authorization:

1. Initiation of Payment Request: When a customer initiates a payment on a merchant's website or platform, the payment gateway receives the transaction details, including the amount to be charged and the payment method.
2. Encryption and Security: The payment information is encrypted to ensure secure transmission over the internet, protecting it from unauthorized access.
3. Routing to Networks: The payment gateway forwards the ISO Message request to relevant network Switch like VAP/MIP.
4. Verification by Issuing Bank: The payment Network sends the transaction request to the customer's issuing bank (the bank that issued their payment method). The bank verifies the transaction details, including the availability of funds and any fraud checks.
5. Authorization Response: Upon verification, the issuing bank sends an authorization response back to the payment Network (Visa/MC/Amex) through the gateway. This response confirms whether the transaction can proceed based on the available funds and other factors.
6. Transaction Outcome: The payment gateway relays the authorization response to the merchant. If the transaction is approved, the customer's account is charged, and the merchant can proceed with fulfilling the order or service. If the transaction is declined, the customer is notified, and alternative payment methods may be suggested.