Choosing an Online Payment Processor

The choice of a payment processor that is online is an important decision that should involve careful study and evaluation. The right one should support the payment methods that your customers use and provide solutions for protecting against fraud, chargebacks and more. Our editors have researched and rated top-performing products according to their capabilities including coverage options, as well as customer experience. They also looked at cost customization, as well as other aspects.

A business will need an account with a merchant, payment gateway, and payment processor to process credit card transactions. A payment processor is an organization which manages all details of transactions and processes transactions on the processing network, and works with banks to ensure you are paid for your goods or services.

The process begins when a user purchases a product from your website using a debit or credit card. The customer fills in their payment details on the form on your site, and securely transmits the information to the payment processor using a payment gateway. The processor contacts the card issuer and confirms whether the cardholder has sufficient credit to pay for the transaction. The processor will then send an email to your site and the gateway once the issuing bank has formally approved or denied the transaction. The message can be simple: “Your payment has been approved” or more specific: “Your payment has been rejected.”

The processor submits the data from the day’s transactions to the card network and transfers the funds from the card issuer to the merchant bank (acquiring bank). After a brief settlement period, the acquiring bank deposits those funds into your merchant account. The entire process usually takes only a few seconds.

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