Third party authentication for card systems

In third party processing, consumers need to register with a third party on the Internet to verify electronic micro transactions. This third party authorization system is also often referred to as Payment Gateways. This is because it acts as a gateway between several parties associated within a payment system. This concept uses a very logical break through to bottlenecks in micro payments. All the micro transactions of a customer are accrued and then are processed once to save the time and expenditure on processing. These third parties basically act as a link between banks, processing agents, credit card issuing services, and the Internet. Payments can be made to them at once using a credit card or draft or any other payment instrument.

The consumer acquires an account with the third party by filing out a registration form. The important thing to note here is that during registration he would need to back his membership with a traditional financial instrument like a credit card. The customer uses this account number while making a purchase. The merchant then has to contact the third party server to gain access to information about the customer The third party verifies the customer's validity through a check on membership and sufficiency of funds. At the same time, the third party server gets in touch with the buyer and asks for a confirmation on the purchase. The customer sends a confirmation. The merchant is given a nod once the customer verifies that he has been initiating the transaction. The third party debits the account only after it gets a confirmation on purchase.

These third party vendors charge nominal fees from customers and some registration fee plus a processing fee per transaction from the merchants. These systems can get much faster with technological breakthroughs in communication. We will now see how a typical e commerce in India web site handles payments from customers. The first step being filling up of the registration form. The registration form has the general fields as in any form and the special fields related to the card. The final form gives you a consolidated list of your shopping and asks for the mode of payment you would like to select. You can select any means as you please and then fill out the shipping details. Then click the submit button (not shown here) to confirm your order. Your shipping date will be mentioned there, so you can now log off and wait for the delivery of your goods.

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