What is Payment gateway ?
Payment Gateway is an application service provider which can authorise payments for any purchase made by a person using either credit card, internet banking in a website. It is just like POS ( Point of Sale) for either website or any other monetary transaction in a secured way. Main function of a payment gateway is to collect credit/debit card information and process the transaction and provide back the result to the website.
Payment gateway has contributed a lot in growth of e-commerce by facilitating secured mode of credit card transaction online using various secured methods as Software As A Service model. Its working principle is quite straight forward. A payment gateway service provider is an authorised centre for making transaction for credit card companies like VISA, Mastercard, Online Bank transaction etc. When some one purchases any goods on internet in any website, payment gateway acquires credit card or banking details secured way, authorise the payment and return control to the website as per transaction result.
How IVR is being used in payment gateway ?
Recently, IVR ( Interactive Voice Response) System is also being used for making payments using phone as providing credit/debit card information using DTMF is easy and can be done on the move without any computer and internet connection.
In most of the IVR payment gateway systems, the banking or credit card details are stored by payment gateway company in a secured way and the transaction is completed with a simple 5-digit or 6 digit numeric password commonly known as PIN( Personal Identification Number). Keeping credit/debit card stored in the payment gateway makes the payment process much quicker as the user does not need to enter card details again and again for each transaction.
When credit/debit card details are not stored, then the details has to be entered using DTMF while processing the transaction. Entering 16 digit card number along with expiry date and CVV may be tedious for frequent users, but many people feel secured that way.
In most IVR payment gateways use outbound dialer to process the transaction. As soon as a person makes a purchase, IVR will make an outbound call to the registered phone number ( first level of security), announces the purchase details and asks him to confirm the purchase by pressing a key. When a purchase is confirmed, the user is asked to enter the numeric password ( PIN ) and on correct PIN, the transaction is completed by charging the credit/debit card.
Advantages of using IVR
There are few advantages of using IVR payment gateways. It is supposed to be more secure as ‘phone tapping’ is not as prevalent as online frauds!
Using IVR payment gateway, one does not need a PC and internet connection to make any purchase or making payment. One just needs a mobile phone or telephone number. Since mobile phone or telephone number already is considered proven identity, it may serve the first level of security.
In developing countries like India, where internet and PC penetration is low, IVR payment gateway can help grow e-commerce as owning phone is cheaper than owning a PC and internet connection. Also, internet connection may not be available all places all the time. So, people can use their mobile or land line phones to make payments using IVR payment gateways.
Drawbacks of IVR for payment gateways
Providing credit card details may be a tedious process for first time users. Also, apart from numeric PIN, it does not provide any other security. PINs are transmitted using DTMF which can be easily decoded.
With explosives growth of mobile phones, IVR payment gateway is logical extension for making phones more useful.