Basics Of Online Payments That You Need For Your Online Business
10-07-2020 13:57
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You need to connect with credit card processors and networks of both issuing and acquiring banks in order to complete an online transaction. To accomplish this task, a payment gateway can help you a lot as it connects your online business to credit card processors and banks.
To accept payments online, you need to take the services of acquiring a bank. It is the job of the acquiring bank to provide you with an internet merchant account. Credit card authorization is also quite important when you want to accept online payments. Credit card authorization verifies the billing details.
Credit Card Association
Credit card association plays a prominent part in the whole process of online payments. Credit card association offers credit card services that are recognized by customer issuing banks. Examples in this regard are American Express and Discover. The main function of the customer issuing bank is to provide their customer with a credit or debit card.
When a customer is doing an online transaction, the customer issuing bank makes sure that the payment information entered by the customer is correct. The customer issuing bank also ensures that the customer has the necessary credit to cover the cost of the product that he is interested in buying.
Merchant Account
An online merchant account is basically a contract between a merchant and an acquiring bank, which gives merchants an option to accept credit cards online. The merchant needs to pay a processing fee for each transaction that is being processed by him. This processing fee varies from merchant account provider to merchant account provider, therefore merchant need to be quite selective when opening an Internet merchant account.
Also, there are many online businesses that stand risky like online gaming, shopping, and so on. Thus, for those businesses, you must acquire a high-risk merchant account that cappable of processing transactions at faster rate and solve payment related issues on the go.
Gateway
The payment gateway has quite a crucial role to play in online payments. A payment gateway is a service that offers a network among customers and merchants in order to process payments and authorizations. A third-party supplier normally implements a payment gateway. The processor in online payments is a big data center whose main responsibility is to process credit card transactions. In some cases, the processor also settles funds to merchants. Often, the processor is linked up with a merchant's website on behalf of an acquiring bank.
And when it comes to processing transactions under high risk merchant account, a high risk payment gateway is required. That facilitates the processing of payments at a larger scale and solve payment related issues fast.
Settlement
The settlement is the last step in online payments. The settlement is the routine in which the processor receives transactions with authorization codes. Once this is done, the merchant gets his payment. If you have a credit card merchant account, you can accept credit cards over the internet. With more than 80% of all online transactions are paid for using online credit card payments, missing out in this front can have a negative impact on your business.
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