If you’re a company that accepts credit and debit card payments online, you should choose the appropriate payment processor. An online payment processor will handle the bulk of the transaction from recording an order to delivering you a statement of payment and working with your bank to make sure you are paid.
When a consumer purchases https://paymentprocessingtips.com/2020/03/11/payment-processing-types-tips/ products on your website or in person at your brick-and-mortar store the credit or debit card data passes through a gateway for payments or PoS terminal. The gateway encrypts the data to protect it and then sends it on to the payment processor, who then forwards it to the card network of the customer. The card network then checks with the customer’s bank to determine if there’s enough money in the account to cover the item. If the bank agrees to the purchase then the card issuer transfers money from the account to the merchant’s bank. The processor for payment will relay this response to the merchant’s website or PoS terminal and inform the customer that their transaction was successful.
When choosing a processor take into account factors such as security, user-friendliness, as well as compatibility with existing systems. Find a processor that has APIs or plugins that can seamlessly integrate with your e-commerce system or POS. Also, you should evaluate your customers’ checkout experience and your team’s reporting and management experience. Don’t forget to ensure that you understand the terms of the contract and how it will be easy to switch providers in the future.