Though it feels like a fairly simple process to the consumers because of getting so many online payment processing services, for businesses, it is not that simple. Accepting payments online is a complex process that requires a lot of things to work in harmony together.
If you are a small business owner, you may not know much about when you get online payment through a popular payment gateway. However, you should know the technical staff, at least the basics to solve any potential issues.
Here is everything you need to know about online payment processing.
What Is Online Payment Processing?
You would require three main pieces of software if you’re going to take payments online. These three elements work together and the whole process will stop operating if any one of them is absent. Here’s a bit more detail on the main components of handling online payments:
Payment Processor
Once the invoice is approved at the end of the supplier, it must be sent to the completion of a verified payment server. Payment processors perform the transaction by exchanging data between the merchant, the merchant’s wallet, the consumer’s card, and their bank. Usually, they’re the firms that supply the hardware at a storefront place. Payment gateways are simply the web counterpart of the hardware at brick-and-mortar locations that customers tap their cards into.
Payment Gateway
In essence, the payment gateway is an online equivalent of a point-of-sale system that helps connect the website and the payment processor. Also, payment gateways can help associate credit/debit card issuers with your merchant account. In brief, the payment gateway manages the transaction’s operational aspect and guarantees you will be able to accept payments from your clients.
Merchant Account
A merchant account is a particular form of bank account which allows online payments to be accepted by your company. There’s nowhere to go with the funds your customers have paid to you without a merchant account. Although you will not have full access to the account itself, within one or two working days, funds from your merchant account will be credited directly to your company bank account.
What to Look for in a Payment Processor?
PCI Compliance
Payment gateways briefly hold client credit card information as it is being processed. There are regulatory criteria in the payment sector that must be met to be an approved provider, but owners of e-commerce stores are encouraged to do their homework before picking a service partner.
Compatibility with Other Software
Every new e-commerce site owner needs to realize that there are several parts of an online shopping platform that need to operate in harmony. That said, a payment processor that has compatible functionality with what you have already placed in place needs to be chosen for your new business company.
Fraud Prevention
Because of the latest high-profile data breaches at Target, Neiman Marcus, and Home Depot stores, you must look for a payment provider that has put a high priority on information management and security. Good payment gateways may have electronic tools, some of which have the intrinsic ability to detect and avoid fraudulent transactions, to fight credit card fraud.
