How Is Online Payment Processing Done In A Business?
In this universe, all the people like to live according to the trends and available new inventions. They use more technologies in different ways. All the items are available online to make people more comfortable getting things they need. There are also more payment methods available for every customer’s purchase. People make payments for electricity, EMI, and recharge for mobiles. Customers used to feel comfortable by providing these options for any purchase. They also used to purchase more things online to they liked the most. You can know about this payment information on the site: website andclarify your doubts.
What can you understand from online payment processing?
This online payment uses three essential things, and they should work together. If any of the keys are missing, the entire system will stop working. Here are some of the crucial key points of online payment processing, and they are:
Payment processors – Are used to manage the card transaction process by transmitting information from the customer’s credit or debit card and are also used to deal with issues such as card limits, credit card validity, and security. It is also known as the middleman between the bank and the merchant.
Payment gateway – is to help connect your website and the payment processor. This gateway also allows you to connect your merchant account with credit or debit card issuers. It also handles the technical side of the transaction.
A merchant account – enables your business to accept online payments.
How does the online payment system works and about the entities?
Eight entities are involved in the online payment processing for a small business: the customer, business, payment processor, payment gateway, credit card network, merchant account, customer’s bank, and your bank. Let’s know how this payment processing works under the following points given:
- First, the customers should choose the item to purchase and complete the checkout process. They should also select the payment options and enter the details on the payment page.
- Then the card information is sent to the payment processor. This payment gateway transfers the information to the payment processor.
- After verifying the customer’s credit card details, the processor transfers the transaction information to the credit card network.
- After completing the verification process, the card network requests authorization to release the funds. After confirming the sufficient funds are there in their account and ensuring it should not be a fraud.
- The issuing bank will respond to the credit card network indicating whether the transaction is approved or not.
- This required information is then sent to the payment processor and requests a transfer from the issuing bank. The funds are then transferred to the merchant account and wait for days to move to the bank account of the business persons by the payment processor.
These are the things involved in the online payment systems with more entities to perform each work at payment processing.