LIFESTYLE
How does online payment work?
BY TIFFANY CHENG PHOTOGRAPHY BY ASHLEY WONG LAYOUT BY NINGJING HUANG AND AMELIA ORAM
W
e are all familiar with the process of online transactions: we are asked to insert our credit or debit card information, after clicking “pay now”, we may be prompted to verify our purchase by inserting a confirmation code that is sent to your phone. Finally, a confirmation message pops up on screen – “Purchase Complete!” But have you ever wondered: how are digital transactions actually made? What parties are involved to construct such convenient and quick operations? How do they interact with each other
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to ensure that transactions are completed in a timely, secure and efficient manner? Online transactions allow businesses to accept credit or debit card payments online from customers. It involves numerous parties and many steps, all taking place in just a few seconds. There are seven main parties involved in a transaction: the customer, the merchant, the issuing bank (customer’s bank), the acquiring bank (merchant’s bank), the card network of both the issuing and acquiring bank, and the
payment “gateway”. First, the consumer is the person who makes the payment to purchase a good or service, while the merchant – the provider of the good or service – receives the payment from the consumers usually through a website or mobile application. Second, the issuing bank, or the customer’s bank, is the financial institution that provides the customer with the payment card, for example HSBC or BOC in Hong Kong. It is also responsible for approving or
XIAO HUA 27/5/2022 7:23 AM
