Choosing an Online Payment Processor

It is important to do extensive research and analysis before selecting an online payment processor. The best payment processor should provide the payment options that your customers use, and offer options to safeguard against charges and fraud. Our editors have studied and rated a number of top-performing options based on features, options for coverage, customer service, customizability, cost and much more.

A business requires an account with a merchant, payment gateway, and payment processor to process credit card transactions. A payment processor is a company that handles all the details of the transaction, and then moves the transaction through the processing network, and works with the bank to ensure you receive a payment for your goods or services.

The process begins when a buyer purchases something on your site using credit or debit card. The customer inputs their payment information in the form on your website, which securely transmits the information to the payment processor using a payment gateway. The processor then communicates with the card issuer to check whether the cardholder has enough credit to pay for the transaction. The processor will then send an email to your website and the gateway when the issuing bank has either approved or denied the transaction. The message may be simple, “Your payment was approved,” or more detailed, “Your https://paymentprocessingtips.com/2020/03/11/payment-processing-types-tips payment was declined.”

The processor then sends the data from the day’s transactions to the card network. Then, the bank transfers the funds from the card issuer to the merchant bank (acquiring bank). After a short period of settlement the acquiring bank transfers those funds into your merchant account. The entire process takes only a few seconds.