Guide for Online Credit Card Processing

Today business on the internet is a given. Without an online presence there can be no growth of business. To use a cliché accepting payments for goods sold online is ubiquities.

 

Requirements for accepting payments online

 

The first prerequisite is to appoint a payment gateway who will facilitate payment between you (the merchant) and the purchaser who will pay either by credit or debit card or effect bank transfer.

Payment gateways will ask you to establish a merchant account. This account holds the proceeds of the amount that apurchaser agrees to pay for goods bought from you. The transaction occur in the following manner

1.       Purchaser browses your website.

2.       Selects goods and pays with a credit card 

3.       Your payment gateway forwards the request  (via a payment processor) to the credit card issuing entity 

4.       Once it is verified that enough funds are available for the transaction to go through the payment is authorized. 

5.       Funds are transferred to your merchant account. 

6.       Payment gateway informs you that the transaction is ok. 

7.       The gateway transfers the money to your regular bank account at predetermined intervals.

 

The back office operations of the transactions are not visible to the paying customer or to you the vendor.There are many payment gateways in business. What differentiates them is the seamless operation for online credit card payment solutions. Some payment gateways can deposit funds into your regular account on the same day. Some make it weekly.

 

Factors in selecting payment gateways

The other major factor in selecting a payment gateway for processing of business payment solutions is the charges.

·         All china payment gateway charge a transaction charge. Each and every transaction is subject to a levy. This is a variable as each payment gateway factors it differently.

·         Setup costs - Some payment gateways do not charge for basic services. Some of them charge a monthly fee for certain added features.

·         Last but not the least is the checkout experience. This is very important. You do not want a potential customer who has done all the hard work of browsing, selecting and come to the all important aspect of paying to be redirected to the payment gateway's website to make the payment..

 

The latest entrants to this business especially in Asia have simplified payment processors that translate to a smooth checkout experience by the customer. Not only that the fees are also fewer.

 

Of course the paramount factor is security of transaction and the security of amounts in the merchants accounts. While it is true that a lot of documentation is expected of you to open a merchant account to prove your credentials and financial strengths it is also prudent on your part to do a due diligence on the strengths of the payment processor.Diligence on how stringent is the level of PCI DSS (Payment Card Industry Data Security Standard) compliance and credit card security practised by the payment gateway is a must.