This page explains how payment gateways, merchant banks, and card issuers fit together in Recurly's transaction flow — and what each party's role is when a payment is approved or declined.

1Transaction flow 2Payment gateways 3Merchant banks 4How Recurly helps

Transaction flow

When a customer subscribes, their payment details are sent from Recurly through a payment gateway to your merchant account and on to the card issuer (or other authorizing institution). Once approved, the transaction settles and the merchant bank (acquirer) transfers funds — minus fees — to your business bank account.

If a transaction is declined, an error message is sent back through the system to Recurly with information on why and how to proceed.

Note The detail available in a decline message depends entirely on what the gateway returns. Some declines are generic, and no further information is available to Recurly or the gateway.

Payment gateways

Credit card and other payments must be submitted through a payment gateway. Gateways typically serve specific geographies, merchant types, or payment methods. Most merchants need only one, but businesses operating across multiple regions may need more than one gateway. Maintaining multiple gateway relationships also provides redundancy.

Merchant banks

Your merchant bank acts as a buffer in the event that transactions are disputed via chargebacks. The merchant bank underwrites this risk by assessing fees to each merchant based on their business type and risk profile.

How Recurly helps

Recurly supports many payment gateways worldwide, as well as a variety of alternative payment methods. The goal is to give merchants the flexibility to choose the combination that best fits their business requirements.