Online Payment Processing for All-Inclusive Payment Transaction Solutions to Merchants Worldwide
Although it may appear to be a simple process, accepting payments online is a complex undertaking that necessitates the cooperation of many different parts. As a small business owner, you may be unaware of what is happening when you accept payment through your online store. However, you should be aware of the mechanisms underlying online payment processing, if only to help you deal with potential issues as they arise. With our simple guide, you can learn more about how online payment processing works.
What is Online Payment Processing?
You'll need three key pieces of software if you want to accept payments online. These three components work in tandem, and if any of them is missing, the entire system will fail. Here's some more information on the essential components of online payment processing:
Payment processor –
The payment processor oversees the card transaction process by transmitting data from your customer's credit/debit card to your bank and the customer's bank. Payment processors deal with issues such as credit card limits, card validity, security, and so on. If they have enough money in their account, the transaction will be approved and the payment will be processed. In some ways, the payment processor functions as a go-between for the bank and the merchant.
Payment gateway –
A payment gateway is an online version of a POS device that connects your website to the payment processor. Payment gateways can also help connect your merchant account to credit/debit card issuers. In short, the payment gateway handles the technical aspects of the transaction and ensures that you receive payments from your customers.
Merchant account –
A merchant account is a type of bank account that allows your company to accept payments online. Without a merchant account, the money that your customers have transferred to you has nowhere to go. While you will not have direct access to the account, funds will be automatically transferred to your business bank account within one or two working days.
Some online payment processing software packages provide an all-in-one solution, combining the payment processor, payment gateway, and merchant account into a single package. In other cases, the payment gateway and merchant account will be combined with the services of a third-party payment processor. If you want to keep things as simple as possible, go with an online payment processing company that offers an all-in-one solution, such as Worldpay or PayPal.
How Credit Card Processing is Doing a Phenomenal Job in Ecommerce Industry?
Credit Card Processing — not to be avoided!
How a company intends to accept and process these payments could make or break it, particularly in foreign markets. It's not enough to keep using the same payment platforms you've been using at home; more emphasis should be placed on credit card security and fraud management, while international customers require payment methods that are tailored to them. This is precisely why businesses should embrace, rather than avoid, worldwide credit card processing.
There are no payment restrictions.
Implementing Online Payment Processing provides businesses with limitless opportunities and tailored solutions for each international market. The advantages begin right away – what currencies can customers use to pay?
Businesses can choose to price their products and services in a variety of international currencies from around the world. Conversion rates should not be used to perplex customers.
A business does not need to be concerned about how it will convert a payment into the currency it wishes to use for settlement. Merchants should look for payment gateways and merchant account providers that offer settlement in their preferred currency.
Amazing potential
When a customer uses a credit card to make an online payment, the information is transmitted to a payment gateway, which processes the data and forwards it to the merchant bank's payment processor, who then relays it to the credit card network, which requests authorization from the customer's international bank. All information is then relayed back to each of the aforementioned parties, and the payment is completed.
Increasingly Secure
When accepting international payments, security is of the utmost importance, which is why the best gateways include fraud solutions as part of their platforms, which are accessible to merchants via gateway integration.
What is the procedure for accepting online payments?
Now that you understand how online payment processing for small businesses works, let's dig deeper into the actual mechanism. Online payment processing involves eight different entities: the customer, the business (you), the credit card network, the payment processor, the payment gateway, the merchant account, the customer's bank, and your bank. The following is how online payment processing works:
- First, the customer selects an item to purchase and proceeds through the checkout process. They will select credit/debit card payment and enter their card information on your payment page.
- The card information is then sent to the payment gateway. The payment gateway will now send the information to the payment processor.
- The payment processor then sends the transaction information to the credit card network, which verifies the customer's credit card information.
- Once the verification is complete, the card network requests authorization from the customer's issuing bank to release the funds. The issuing bank will submit a response to the credit card network indicating whether or not the transaction has been approved after confirming that there are sufficient funds in the account and running verification checks to ensure that the transaction is not fraudulent.
- This information is then passed on to the payment processor, who requests a fund transfer from the issuing bank. These funds are then transferred to the merchant account. Where they will remain for a few days before being transferred by the payment processor to the business's bank account.
This is how online payment processing for small businesses works. When selecting a payment processor for your company, it's critical to make sure it's a good fit. Every industry has a slightly different approach to managing online payments. So be sure to consider your company's specific needs before deciding on an online payment processing company to work with.
How do you obtain Online Payment Processing?
Numerous organizations provide payment processing services. Traditional options, such as banks, as well as modern ones, such as online providers, are available. The majority of them offer tier pricing.
When selecting a payment processor for your company, thoroughly research the services on offer. Fees, customer support, add-on services, and payment type support are all important considerations.
Traditional providers will most likely charge less, but their services will only include the essentials. A modern payment processor, on the other hand, will provide you with a slew of additional, valuable services that will help you expand your overall business.
How Instantcharge can help you Organize your Business Payments for the Better?
Instantcharge is best known for its robust API, which allows web developers to integrate payment processing systems into their websites and mobile apps. We have our reach in multiple countries, but we support more currencies. Instantcharge also accepts a variety of payment methods, including credit/debit cards, major wallets, buy now pay later, and many more.
Instantcharge has allowed access to all award-winning fraud prevention solutions through a single interface to the gateway. You can have the most efficient and streamlined payment processes working for you with Instantcharge.