Intro to Alternative Payments
Pockyt Payments: Simplifying Alternative Payment Methods and Digital Wallets Integration
Alternative payment methods encompass a wide range of non-traditional ways customers can pay for goods and services. These methods often utilize digital technology to facilitate transactions securely and efficiently. Digital wallets, on the other hand, are a specific type of alternative payment method that allow users to store their payment credentials digitally, eliminating the need for physical credit or debit cards. They are primarily mobile applications but can also be accessed through desktop websites or applications. Digital wallets revolutionize the way payments are made for products and services by offering features such as ATM withdrawals, fund pre-loading, and peer-to-peer payments. They can also store loyalty cards, vouchers, tickets, and other relevant information, making transactions convenient and hassle-free.
With alternative payment methods and digital wallets, customers can enjoy the convenience of making payments using their smartphones, wearables, or other digital devices. This technology is rapidly gaining popularity, especially among younger generations who value seamless and contactless transactions.
- Customer Initiation: The customer approaches the business's point of sale (POS) system or website to make a purchase using their digital wallet.
- Communication Initialization: The customer's mobile device establishes a secure connection with the business's POS system or website. This communication typically occurs over a secure internet connection using protocols like HTTPS.
- Purchase Details: The customer selects the items they wish to purchase, and the business's POS system or website calculates the total amount due.
- Payment Method Selection: The customer chooses the digital wallet as their preferred payment method from the available options presented by the business's POS system or website.
- Transaction Initiation: The business's POS system or website sends a payment request to the payment processor's servers. The request includes details such as the transaction amount, a unique transaction identifier, and any additional data required by the payment processor.
- Encryption and Security: The payment request, along with any sensitive data, is encrypted by the POS system or website using cryptographic algorithms to ensure secure transmission. This prevents unauthorized access or tampering of the payment information.
- Payment Processor Interaction: The payment processor's servers receive the payment request from the business's POS system or website. They authenticate and validate the request, ensuring it comes from a trusted source.
- Digital Wallet Authentication: The payment processor's servers initiate the authentication process with the customer's digital wallet. This involves verifying the customer's identity, authentication credentials (e.g., PIN, password, biometrics), and ensuring the availability of funds in the customer's digital wallet or linked bank account.
- Transaction Authorization: If the customer's authentication and funds availability checks are successful, the payment processor's servers authorize the transaction. This involves reserving the necessary funds for the purchase in the customer's digital wallet or linked bank account.
- Bank Interaction: Upon transaction authorization, the payment processor's servers communicate with the customer's linked bank or card issuer to initiate the funds transfer. They provide the necessary transaction details and request the transfer of funds from the customer's account to the business's account.
- Bank Authorization: The customer's bank or card issuer validates the transaction request, ensuring it aligns with their security protocols and the customer's available funds. If approved, the bank authorizes the transfer of funds to the payment processor.
- Funds Transfer: The payment processor's servers facilitate the transfer of funds from the customer's bank or card issuer to the business's designated bank account. This transfer may involve integration with banking systems or settlement networks to ensure accurate and timely funds movement.
- Transaction Confirmation: The payment processor's servers update the transaction status and notify both the business's POS system or website and the customer's mobile device about the transaction's outcome. This communication is often facilitated through real-time notifications or API callbacks.
- Receipt Generation: The business's POS system or website generates a receipt for the completed transaction, which can be presented to the customer for their records.
Throughout the process, encryption and secure communication protocols ensure the confidentiality and integrity of the transmitted data. The payment processor's servers handle the authentication, authorization, and funds transfer processes, interacting with both the customer's digital wallet and the bank or card issuer. The business's POS system or website acts as the intermediary for initiating the transaction and receiving the confirmation from the payment processor, enabling a seamless and secure in-store purchase experience.
Last modified 3mo ago