Online Credit Card Processing – Accept Credit Card Payments

Most merchants face difficulty in understanding how the online credit card processing system works. Because there are various steps to perform. So we have created a guide on credit card processing to make things easy. 

What do you understand by an online credit card processing system?

An online credit card processing performs when a business accepts online payments from customers via credit cards at their online store. That involves the credit card payment processor and a payment gateway to complete the process of transferring the information on the website.

Nowadays, a credit card processing system become essential for online businesses. Yet there is a huge rise in the popularity of digital payments and the recurring bill model.

Members of Online Credit Card Processing System

From the customer clicks the Pay button on your website and to the merchant receives the payment. So, these are the players that are involved in the payment processing.

  • Cardholder. The customer makes the online transaction by using their credit or debit card.
  • Merchant. The merchant is the seller of products or services.
  • Credit Card Networks. It refers to credit card brands like Visa, RuPay, or Mastercard.
  • The Acquiring Bank. The merchant will receive the settled funds in the acquiring bank.
  • The Issuing Bank. An issuing bank refers to the customer’s bank. And the transaction amount deducts from this account.
  • Payment Gateway. Amald’s credit card payment gateway verifies the customer card details. Moreover, it manages settlement, acts as a mediator between the website and the acquirer. It stores sensitive data such as credit card information.
  • Payment Processor. The payment processor help in transferring the payment details from the credit card company to the banks.
  • A payment gateway ensures the security of the customer’s sensitive card information that forwards from the customer to the acquiring bank.

    Factors that affect online credit card processing system.

    For better credit card processing, some essential factors that play a vital role are.

  • Transaction Speed. Most customers want to pay via debit and credit cards, the faster mode of transacting with your business. So, you will need to choose an online credit card processing system that can manage multiple transactions. An excellent credit card processing system can complete a transaction in less than two or three seconds.
  • Strong Updated record. Credit card system cancellation can make a loss to your business. As an outcome, customers can assume your brand is inconvenient, may also move to a different online store. Along with reliable card processors will have the perfect updated history and backup that measures to cut down service interruptions.
  • Transparent Pricing Structure. Your credit card processing service should have a transparent pricing structure. Because a concise pricing structure will help you in analyzing all the information.
  • Great Customer Service. As you know, troubleshooting and management of your credit card payment gateway is an essential part of an online business. So you will have to ensure that your credit card processing system will provide 24/7 customer support.
  • The steps performed in the credit card processing system are as follows.

  • Authorization process. In online credit card processing system. The first step is the authorization process. That verifies the identity of the customer and helps in avoiding fraud issues.
  • There are four steps in the authorization process of a credit card processing system

    Cardholders or customers provide their card details at checkout then the merchant’s payment gateway tokenizes and encrypts the information. And transmit it to acquiring bank.

    The encrypted data is forwarded to the payment provider. Then the processor uses the card association’s network to forward the data to the customer’s bank (Issuing Bank).

    The bank then verifies the identity of the customer to process the payment.

    After that, according to the verification report. The bank will allow or decline the payment that is viewed in the merchant’s payment gateway. After allowing or declining from the bank, the customer will process the transaction or redirect to a new payment page.

  • Settlement Process. The second step in the online credit card processing system is the settlement process that happens after the approval of the transaction. When the bank authorizes a transaction, the merchant can perform a sale. But, the merchant receives the funds only after the settlement.
  • So, there are four steps in the settlement process of an online credit card processing system.

    When the merchant receives the authorization. The payment gateway will send the approval to reconcile the payment to the payment processor.

    Successful reconciliation. The payment processor deducts the application fees from the transaction amount. That deposits the amount in the acquiring bank of the merchant. So this process is called settlement and can take one or two business days. It is known as the settlement period. Funds do not settle in real-time. Rather than, the transactions store for a day before completing the settlement process. Moreover, it helps to reduce the total processing costs when a merchant performs many sales in a day.

    From the issuing bank, the card network deducts the transaction amount. Then it sends the amount to the payment processor to submit in acquiring the bank account of the merchant.

    The customer’s issuing bank deducts the transaction amount from the customer’s account. And the bank sends an invoice or account statement to the cardholder which is known as the credit card statement. So, the customer requires to settle the credit card performance as per the statement under the fixed date according to the billing cycle. But if the customer fails to do so, interest charges are applied by the bank.

    Online Credit Card Processing System | 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 on a daily or monthly basis. 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, these deductions include the following types of fees.

  • Startup Fee.
  • Monthly statement fee.
  • Discount rate.
  • Transaction fee.
  • Minimum monthly fee.
  • Chargeback fee.
  • Let’s get a payment gateway for credit card processing.

    Keep your keen eye when choosing an online credit card processing system and payment gateway. However, the security of your customer’s credit card details and your reputation are both at risk. So credit card payment gateways are integral for your business.

    But, payment gateways provided by Amald make it easier. They usually work with banks, credit card networks and enable businesses to process payments securely.

    Visit : Online Casino Merchant Account, Online Gaming Merchant Account, Forex Trading Merchant Account

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