Payment Life-Cycle

Payment life-cycle is the term used to describe the payment journey, from beginning to end. The life-cycle depends on the payment method chosen.

There are different life-cycles for different payment methods. For a card payment the lifecycle looks like this:

A purchase is made using a card, the merchant forwards the request to the acquirer, the acquirer forwards the request to the card scheme associated with the buyer’s credit card. The card scheme or card network– Visa, Maestro, American Express, etc..– forwards the request to the issuer, the issuer checks if the cardholder has sufficient funds to pay for the transaction. If yes, confirmation is sent back via all the different stages until it arrives back at the merchant. Now the sale is complete. But when do the funds reach the merchant’s account? To get the funds in the merchant’s account we need a settlement (the money received for the goods/services, after all fees are deducted). This can happen, daily, weekly, monthly, or at any agreed interval. The PSP used to process the payment will forward the funds to your account minus the processing fees (payment to cover costs of processing the payment) and the various “cuts'' that are deducted from the sum by the different players involved.

Find more information on a payments lifecycle in this article

An adapter is the technical component that is used to integrate and connect an acquiring bank or PSP to the IXOPAY gateway. This is done via the API. The adapter "speaks" to the other system.

You can find an overview of all adapters offered by IXOPAY here

A connector is need to activate an adapter with the configuration of a merchant account. The respective transactions with the acquiring bank or the PSP are processed via a connector for this merchant.

A company, which combines the functions of both a payment gateway and a payment processor, can connect to multiple acquiring and payment networks. Additionally it can be an acquirer and provide risk assessments and other financial services. For merchants, it is often cheaper and more convenient to use services of a PSP, rather than have different contracts with various payment gateways, processors and acquiring banks.

In the payments industry, the term "transaction" is used to indicate the transfer of a specified amount of funds from a customer for purchasing products or services from a merchant, or for fulfilling any other obligations between the two parties. Funds are usually transferred by means of card payments or local payment methods (bank transfers, e-wallets, mobile payments, etc.).

A failed transaction is when a transaction is not completed or processed. There are many reasons why a transaction can fail, such as connectivity, ie the connection was lost mid transaction; maintenance, the PSP is experiencing downtime; authenticity, the bank does not approve; wrong data, information was incorrectly entered; and insufficient balance.