Online Credit Card Processing Matters A Lot in An Online Business

Nowadays, as marketplaces become more digitalized. It has become essential for online businesses to get new and advanced technologies.

According to a survey of 1800 customers. 85% of them said that it is quite important for a business to offer the facility to pay by using a credit card. Expectations are even higher for some types of online businesses. Such as restaurants, supermarkets, and retail businesses. We can say, it is necessary to accept credit card payments for any business today.

Whether it is on a point of sale (POS) device, online, or via mobile phone. But it requires a payment provider to manage credit card transactions securely. 

Members Involved In Online Credit Card Processing

Each credit card transaction performs in a few seconds. And that is made possible by the seamless cooperation of these six participants.

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Customer. Customer is responsible for providing their credit card details at the time of sale.

Merchant. The merchant sells products or services to the customers.

An Acquiring Bank. Whether a merchant interfaces with customers online, via phone, or in-store. They will require a merchant account to process credit card payments.

Payment Service Provider. The payment service provider is a third-party company. Sometimes an affiliate of the acquiring bank. That will provide the infrastructure to accept credit cards and digital wallets.

Credit Card Network. There are four major credit card networks, Visa, Discover, MasterCard, and Amex. They are responsible for receiving credit card payment details from acquiring processors.

Card Issuing Bank. The card issuing bank is the bank that issued the customer’s credit card used in the transaction. It accepts the request for payment authorization. And approves or declines the transaction according to the customer’s available funds.

Process of Online Credit Card Processing

Purchasing by using a credit card performs a complex process. And where details transmitted from the customer’s credit card to the merchant’s POS device. Then forward to the customer’s bank. And the whole process is done in just a few seconds.

Three steps perform in online credit card processing:

Authorization

The primary stage of any credit card transaction is payment.

At an offline store, the customer pays by either swiping, tapping, or dipping their card. However, they can also pay by using a digital wallet linked to a credit card.

Online, the customer enters their credit card details in a payment form on an app or website.

Online transactions perform by mobile phone. So, a virtual terminal provides secure online credit card processing.

The merchant’s credit card terminal or website forwards the customer’s card details. And that includes a credit card number, expiry date, security code, and payment amount. Yet this information is sent to the appropriate credit card network (e,g. Visa, MasterCard). And then forwarded to the customer’s issuing bank for authentication.

Authentication

The issuing bank accepts the payment request. And confirm if the customer has sufficient balance to complete the purchase. The bank will also perform security checks to authenticate the customer’s details. Also, determine whether the transaction reflects any signs of fraudulent activity.

If everything is confirmed, the bank account approves the transaction. And transmits this to the payment processor and then to the credit card terminal.

Clearing

At the clearing stage, the transaction details are transmitted to the customer and merchant as a statement. At the end of a business day. However, the merchant sends a batch of approved credit card transactions to the payment processor.

The credit card processing company then transmits details of transactions to the associating credit card network. And credit card network forwards it to the card-issuing bank. Also, the funds of transaction fees are moved between banks, credit card networks. And payment processors to keep the system running.

Businesses Keep Online Credit Card Processing Secure

The integrity of online credit card processing relies on the assumption. And the parties have confidence in the security of the system and take the essential steps to keep it secure. For example, customers are allowed to pay via credit card. However, if they allow forwarding their payment details to businesses. In return, businesses have to keep the information safe and secure.

The Payment Card Industry Data Security Standards will provide you with guidelines known as PCI compliance. Because that applies to any organization that accepts and processes credit card payments. 

Explore your online credit card processing options

If you are looking at the options for accepting online credit card payments. It can be easy for merchants to think that one method is better than another. Honestly, the best option is the one that matches the requirements of the business.

Credit Card Terminal. The standard credit card terminal is the common device to accept credit card payments. And it is a must-have for brick-and-mortar stores. Credit card terminals have been evolving over the years. But they were only able to read the magnetic stripe on a card via swiping. Whereas today’s terminals can read EMV chip cards and devices with NFC chips.

Mobile Point of Sale System. A mobile POS is an electronic software installed on a mobile device, like a tablet or smartphone. And that can accept online credit card payments and process payments. mPOS services are suitable for small businesses and companies with different locations, like events companies, trade shows, and weekend merchants.

eCommerce payments. The additional security measures of accepting online credit card payments. So make it more important to get a reliable processing company. And provide with the facility to accept and store credit card information online and offline. 

Online Credit Card Processing Transaction Fees

The members involved in an online credit card payment processing system apply a fee for their services.

Third-party payment service providers can also charge a fee daily or monthly. They can also receive credit card fees from your transaction amount. Whereas a processing fee deduction happens on a daily or monthly basis. And the fee for the whole month is deducted at the end of the month.

So, the deductions consist of these types of fees.

Startup Fee.

Monthly statement fee.

Discount rate.

Transaction fee.

Minimum monthly fee.

Chargeback fee.

Let’s get a payment gateway for online credit card processing

Keep your keen eye when choosing a payment gateway for online credit card processing. And it has a great impact on the security of customers’ credit card details. Also on the reputation of your business. So, the best payment gateway for credit card processing is essential for your business.

So, Amald’s provided payment gateway makes it easier to process online payments securely. Moreover, they usually work with many banks, credit card networks. And enable businesses to process payments securely.

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