Accept Credit Card Payments Online To Support International Ecommerce Transactions

Have you ever wondered what occurs when an internet payment is completed in the background? It might be difficult to traverse the complex terminology used in the industry. And understand what each actor performs and how if you are just starting started with the business of eCommerce and Accept Credit Card Payments Online. Or if you are simply inquisitive about the procedure.

The Merchant

Let's start with the merchant or the person who makes products or services available for purchase.

To begin selling and Accept online payments from customers, a merchant must engage with an acquiring bank. To apply for and be granted a merchant account. It enables the merchant to accept credit and debit cards. An acquiring bank is a bank or financial institution that accepts (or acquires) transactions for merchants on behalf of the debit and credit card networks. If you're wondering what an acquiring bank is, it's a bank or financial institution that is a registered member of a card network, like Visa or MasterCard. Later on in this blog post, we'll go into more detail about this.

A merchant account is a unique account number given to a specific merchant by an acquiring bank. This account number is used by the merchant to identify itself as the owner of the transaction information it sends to the bank and the recipient of the proceeds from the transactions. It is comparable to other unique account numbers issued by a bank (such a bank account number). Merchants are required to confirm that they will abide by the rules established by card organizations like Visa or MasterCard as part of the application process to get a merchant account.

Cost Associated with Merchant Account

There are several costs associated with merchant accounts. These charges may be applied as a percentage of each transaction, as a monthly fee, or both.

Once the business has a merchant account, whenever a consumer uses a credit or debit card to make a purchase. The business sends the transaction information to its acquiring bank, which then sends it to the cardholder's issuing bank via the card association network. The cardholder will be billed by the issuing bank for the amount owed to the merchant whether the charge is approved or declined.

The transaction data will pass from the retailer to the wallet provider, then to payment processors, acquiring banks, and so on whether the client uses a digital wallet (such as Visa Checkout, Google Pay, etc.), or another online payment method.

How Does a Buying Bank Operate?

For a merchant, acquirers/acquiring banks accept (or acquire) transactions on behalf of the debit and credit card networks. They are registered members of, such as MasterCard or Visa. The card network links issuing banks and acquiring banks to enable the verification of consumer transactions. The acquiring bank will decide whether to approve or deny a transaction. Whenever a cardholder uses a debit or credit card to make a purchase based on the information the card network and issuing bank have on file regarding that cardholder's account.

An acquirer handles transactions and takes on the related risk and liability in addition to managing them. As a result, the acquirer levies a variety of costs for its services. These charges differ depending on the acquirer; however, they are typically imposed for actions like transactions, refunds, chargebacks, and so on. The acquirer assesses fees on behalf of the card network, the issuing bank, and themselves. Taking into consideration interchange fees for credit cards as well.

The Process of a Card Authorization

To determine whether a cardholder's debit or credit card has enough money on it and is authorized to make a purchase from a merchant, authorization is required. When a cardholder tries to use a debit or credit card to make a purchase of a good or service, an authorization request first appears.

To ascertain the cardholder's bank, the authorization request is initially transmitted through the merchant's acquiring bank and associated payment processor (issuing bank). Following notification, the cardholder's issuing bank decides whether to allow or reject the transaction with the merchant based on the cardholder's available credit. The necessary money in the receiving account will be put on hold (referred to as a "authorization") if the issuing bank approves the transaction.

The payment processor subsequently relays the outcome (approved/declined). And the reason for it to the merchant and customer through the payment gateway. The issuing bank then sends the result (approved/declined) and the reason for it back to the issuing bank. If the transaction is accepted, the money will be taken out of the cardholder's account and a receipt will be sent to them. In actual time, the entire procedure that has been explained thus far doesn't last more than a few seconds.

The next step is for the retailer to complete the customer's order. The issuing bank will clear the authorization on the customer's money when the merchant completes the order and get ready for transaction settlement with the merchant's acquiring bank.

How Does The Exchange of Credit Cards Work?

The clearing and settlement of records between members of a payment system is referred to as the exchange. The fees or transfer pricing between issuers and acquirers can also be described using this phrase. Every time a credit or debit card is used, participating acquirers and issuers pay or receive interchange. For instance, banks pay interchange for transactions involving cards. This fee is typically paid to the issuing bank, the consumer's bank, the merchant's bank, or the acquiring bank.

In order to maximize efficiency, merchants typically batch-submit all of their approved transactions to their acquiring banks at the end of each day through their payment processors. The issuing banks of the customers get transaction settlement requests from the acquiring bank.

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  • Processing payments in many currencies
  • Different currencies are supported for payment processing Instantcharge.
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  • No limits on the quantity of transactions
  • You can manage however many transactions you require. This gives us an advantage over some other e-payment providers that may limit the number of daily or monthly payments you may make.