Choosing an Online Payment Processor
If you’re a business that accepts credit and debit card payments online, you must choose the appropriate payment processor. Online payment processors take care of all the work, from capturing sales to sending you a statement of your bill and working with your banks to ensure you get paid.
When a buyer purchases products on your website or in person at your brick and mortar store their credit or debit card information goes through a payment gateway or PoS terminal. The gateway encrypts the data to ensure its security and transmits it to the payment processor, who then sends it to the card network of the customer. The card network checks with the customer’s bank to determine if there is enough money in the account to purchase the product. If the bank approves the purchase and the card issuer accepts it, they will transfer funds from their account to the bank of the merchant. The payment processor will relay this response back to the merchant’s site or PoS terminal and inform the client that their purchase was successful.
When selecting a processor, take into consideration security and user-friendliness, and compatibility with existing systems. Choose a processor that offers APIs or plugins that seamlessly integrate with your online store system or POS. You should also look at the checkout experience of your customers and the reporting and transaction management experiences for your team. Not least, ensure that you understand the terms of the contract and how it is possible to change providers in the future.