Online payment processing, a fundamental requirement of ecommerce websites, involves processing credit and debit card payments through a web-based online payment solution, which can be either a merchant account/ payment gateway combo or an all-in-one online payment solution. However, in order to find the credit card processor, it is not compulsory to have intimate knowledge of the inner-workings of the bankcard system. However, you do need to possess a basic understanding of how credit card transactions work and the fees associated. By having cognizance of the payment processing framework, you will be able to identify the areas of possible savings.
How it Works
Technology has done a marvelous job by revolutionizing the banking system, and facilitating bankcard networks to ferry billions of transactions. In credit card payment processing, all information relevant to a transaction is passed by a card terminal or software to a processor, and thereafter, through to the card issuing bank for approval. Subsequently, the issuing bank sends an authorization through the card network to your processor before the approval is sent to your terminal.
Advantages of Credit Card processing:
- Fast Payments
- Secure
- Convenient
- Cost-effective
Key Players
- Customer/ Cardholder
- Merchant
- Merchant Bank (Acquiring Bank)
- Issuing Bank (Cardholder Bank)
- Card Associations (MasterCard/Visa Card)
Credit Card Processing: Framework
- Merchant receives payment information from the customer
- Authorization request is the sent to the card issuing bank
- Approval is received from the cardholder bank (Issuing bank)
- Transfer of funds is initiated from the consumer’s credit card account to the merchant’s account
- Whole day transaction is sent to the Merchant Processing Bank and from there to corresponding card issuing bank for payment
- Approximately after 1-2 days, funds are transferred to the merchant’s account
As per the above framework, obtaining an authorization for a transaction is just the first step. As in whole, a credit card transaction is a 2-stage process consisting of authorization and settlement. It is imperative to understand these processes as different fees are incurred at each stage, and a minor glitch or partial failure can result in increased costs as credit card sales may not be deposited.
4 comments:
Good blog site created. I am really appreciate your logic and congrats you for providing me such a valuable information about Online credit card processing services .It is easy, secure and safety.you can easily transfer to the other account.
Thank you for sharing the information.
Credit cards are increasingly becoming a payment method of different types of businesses. Credit cards are encouraging buying an item or service easily.
There are many companies that are providing the service of credit card payment processing. One such credit card processing company, named as, Alternative Merchant Processing Inc., is providing the service of merchant account, credit card payment, offshore merchant account etc.
I’ve been browsing online from more time, yet I never found any interesting article like yours. It is pretty worth enough for me.
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Credit Card Payment Services
CCPS is a fast, quality driven provider for Credit Card Processing & ACH. We service all legal merchant types. We can help you get your merchant account up and running at a great rate, AND most importantly, keep it running.
please Contact us for more details:
Email: dguest@creditcardpaymentservices.com
Phone:1-800-475-6011
web: http://creditcardpaymentservices.com/
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