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Ecommerce Credit Card Processing - Take Your Business To Ecommerce Platform

Have You Ever Thought That How Your Ecommerce Site Process Credit Card 

There is nothing rocket science in the processing of a credit or debit card by an eCommerce site. But the bitter truth is that most of the merchants with an eCommerce website doesn’t sound familiar with the processing with how an eCommerce Credit Card Processing Works? Well, to processes a credit card, you need a safe and secure payment processing solution. Merchants have a couple of options to process credit card either through its own payment gateway and merchant account or through third-party aggregators or payment facilitators. But before proceeding to the working procedure, a merchant should have familiar with some of the terminology frequently used in the payment industry. Let’s discuss them all one by one.

Ecommerce Credit Card Processing

Merchant Account

A merchant account is the same as your bank account, which is used to accept payments from your customer. Once the customer pays you through your eCommerce website, the payments first go to a merchant account. The merchants didn’t have access over it. The merchant account is just a temporary holding account which is provided to merchants by the payment processor. The processor, after processes the funds and deducts the transactional fees and other charges, transferred the remaining funds to the merchant’s bank account. Now the merchant has the full access over his funds.

Payment processor

A payment processor is a company that provides various merchant services to the businesses or merchants. A payment processor is an entity that helps the merchants or acts as a connection between an acquiring bank and the merchant. It is the responsibility of the payment processor to manages the credit card transaction between the two. A payment processor not only provides eCommerce credit card processing but also other services like eCheck/ACH processing, Virtual terminal, payment gateway and other devices like credit card terminals or POS system. Now you may have an idea that the entities who are providing all these services are payment processor or sometimes merchant service providers.

Payment Gateway

A payment gateway is one of the merchant services that help the merchant to accept credit/debit card transaction online. The payment gateway authorizes the transaction and helps in the transactional data flow from the web platform to the acquiring bank. A payment gateway not only integrates with an eCommerce website but also in the POS System for a retail shop or traditional brick and mortar. Usually, payments gateways are PCI-Compliant and encrypt all the sensitive information of the customers through SSL protocol. Hence payment gateway is a software service which helps in authorization and secure transactional data flow.

Payment Aggregator or 3rd Party Payment Service Provider

Before moving further, what if businesses have no merchant account, or he is just a small business not ready to open a merchant account with the payment processor. Here comes the role of a payment aggregator. An aggregator or payment service provider helps the merchant to accept payments under his account. There could be several merchants who are accepting payments within aggregator’s merchant account. The aggregator splits his account to several sub-account to help small business with very low transactional volume.

Well, this is enough now to understand how eCommerce credit card processing works. As soon as the customer enters his card details to the checkout page of the website, the payment gateway authorizes it and encrypts it. The payment gateway facilitates the flow of encrypted data to the acquiring bank. The acquiring bank transfers the data to the credit card issuing bank and waits for its response. Once the acquiring bank receives the response, it forwards the response code back to the payment gateway. Based on the response code, the gateway approves or declined the transaction. Once the transaction is approved, the payments get to deduct from the customer account and settled into the merchant account. This is how the transactional process works. Our aim is just to make a basic understanding among customers and merchants. If you have any query, Contact Quadrapay.

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