Payment Gateway Indonesia: Definition, Benefits, Types, How it Works

Transactions using credit cards, debit cards, digital wallets, QRIS, and others that offer convenience are now increasingly being used by many people. However, did you know that for online transactions to run easily, we need a technology called payment gateway.

If likened to something, a payment gateway is a gate between sellers and buyers when making online transactions. You could say that this payment gateway is indeed very important so that all types of transactions carried out online can be done more easily. 

In this article, we will discuss more about payment gateways starting from the definition, benefits, types, and how they work. So, check out the full explanation below!

So, What is a Payment Gateway?

Broadly speaking, a payment gateway is a technology system that authorizes the transaction process between merchants and buyers.

In the process, the payment gateway is tasked with validating the payment information made by the buyer, then sending a payment request to the relevant financial institution, and sending information to the buyer about the status of the transaction.

When making online transactions, our expectations are of course that the transactions will be done more quickly and easily. This is because, without a payment gateway, customers who want to make online transactions must transfer money through the bank first.

With a payment gateway, the transaction process can be done in various ways, ranging from using Indonesian credit cards, debit, or other types of payment systems such as e-wallets.

Benefits of Using Payment Gateway

Using a payment gateway will certainly provide many benefits for business owners. So, what are the benefits?

1. More varied payment methods

One of the main benefits of using a payment gateway is that it provides a variety of payment methods.

If you are already working with one payment gateway, merchants can accept various types of online payments such as credit cards, debit cards, QRIS and various other digital payment methods. With this, it will be able to attract many other prospective buyers to shop at your store.

2. Faster and easier transactions

By using a payment gateway, all transactions are done automatically, making the process faster and easier.

Payment gateways are usually also equipped with transaction management that gives sellers access to manage payments easily. So, sellers can track payments, manage refunds, and oversee transaction reports.

3. Secured transactions

An excellent benefit of payment gateways is that transactions are secured. The payment gateway transaction system has multiple layers of security and uses strong security encryption to protect data, including credit cards. So you don't have to worry about crimes such as skimming, data theft, and others. With this, you can provide a sense of trust for your customers.

4. Broader reach

Some Indonesian payment gateways already provide foreign transaction support. This allows sellers to transact with customers in different countries. So, there are no more country barriers when someone wants to buy your product.

Types of Payment Gateways

There are various types of payment gateways in Indonesia that are used according to the needs and capabilities of a business. So, what are the types?

1. Hosted payment gateway

Hosted payment gateway is a type of payment gateway that requires customers to leave the website to be redirected to the payment page to complete the transaction process.

After making the payment, the customer will be redirected back to the website with a confirmation notification of the transaction made.

The fact that the payment process is done outside the merchant's website makes the security level of this type of payment gateway higher since the payment page is hosted separately.

2. Self-hosted payment gateway

Self-hosted payment gateways allow the payment process made by the buyer to remain on the payment page provided by the seller. So, the seller is fully responsible for the security of his payment page, thus requiring strict security implementation.

3. API-hosted payment gateway

API-hosted payment gateway is a type of payment gateway that uses an application programming interface (API) to connect the seller's website with the gateway. 

The payment process on this gateway is still done on the merchant's website directly, but through the API, the merchant can customize the functions and features on the payment page.

4. Local bank integration gateway

Local bank integration gateway is a type of payment gateway that integrates payments through local bank transfers. This type of gateway is suitable for markets with a preference for payment through traditional banks, this gateway allows direct payment from local bank accounts with the cooperation of local banks.

5. Mobile payment gateway

Mobile payment gateways are tailor-made for processing payments via mobile phones. By supporting payments through mobile apps, these gateways offer the convenience of shopping with a mobile phone and sometimes support the use of digital wallets. The payment process here is optimized for a simple and fast user experience.

How Does a Payment Gateway System Work?

Basically, a payment gateway system serves as an intermediary between a merchant's website and a financial institution, and processes payment transactions made online. Although it sounds quite complicated, the way a payment gateway works is actually quite simple. Here are the steps:

• The buyer selects the product or service they want to buy, after which they are directed to the payment page.
• The buyer fills in the payment details and then the seller's website sends the payment data to the payment gateway.
• The payment gateway encrypts the payment data to protect any information provided.
• The payment gateway validates the data information provided.
• When the transaction is accepted, the payment gateway sends a request to the bank to send funds from the buyer's account to the seller's account.
• The bank then responds to the transaction
• When the transaction is accepted, the seller's website receives a payment confirmation and completes the order process.

Bersama Host to Host

Bersama Host to Host Payment is a service from Artajasa that can integrate billing provider payments with collecting agents, so customers can pay their bills at the nearest collecting agent. Bersama Host to Host service currently accommodates many types of payments, such as insurance, multifinance, public utility, telecommunication, and donation.

By using Bersama Host to Host, you will get a variety of cooperation services such as; online and realtime payments, special gateway for billing providers, customer support, reconciliation operations, settlement according to the desired bank, and implementation guides (PKS, SPP, UAT, TO to Live).

If you would like to join the Host to Host Shared service, contact us via email bersama.id@artajasa.co.id