That’s How E-commerce Merchant Online Payments Work
Every online business owner comes to understand that his business needs to have an online appearance since all the people all over the world are shopping on the Internet most of the time. The method of moving business on the internet starts with understanding the dos and donts of e-commerce. Among topics what to sell online, and how to start an online store for your product, the most difficult one is how to accept credit card payments and how to transfer the money online, This way most businesses including gaming sites and online casino operators move their funds digitally.
The money processing industry is packed with jargon that needs the patience to be learned, especially through the eyes of a person who doesn’t know the lingo. In the words of some intelligent person, if you can’t describe it to a kid, you don’t know it yourself. You figured it outright, these are the golden words of Albert Einstein. In addition to what we have said above, if you don’t understand the basics of payment processing regulations, you are not able to take payments online.
For your customer, the credit card payment either offline or online is quite simple and straight forward. A customer selects an item and goes to the checkout page to pay for the item or the service. Unlike the merchant, he doesn’t have to understand the alchemy of the process where the money is transferred from and how the money will be transferred to the merchant.
The whole topic on online payments is a bit tricky to answer without writing a thesis on payment processing. Each of the words deserves to be recognized as a separate topic in itself. The following, therefore, is not created to be an encyclopedic display of information about how online money transfers work for merchants. Nevertheless, it describes the main methods that happen during online payment portals.
3rd party payment processors – those that don’t need an internet merchant account, and combine with your store quickly – are the best option for startups.
The Normal Way To Accept Online Payments
You might think, what is so complex about online payments? There is one easy form on a website where a customer types his payment details and press a normal-looking button “Pay”. Then the seller waits for transferring money to his account and all is done. Well, in a perfect world, this is really what happens, but in the real world of developers, it’s way more complicated, time-consuming and sometimes frustrating.
Normally, to do this an online retailer needs:
- a special bank account which can hold the funds they get from online payments until they are transported to a business bank account – this is a merchant account;
- a secure service to check and authorize payments to that special account – this is a payment gateway in simple terms.
This is a type of a bank account that enables accepting Visa, MasterCard, American Express or any other debit or credit card payments from online and it is known as a merchant account. A merchant account means a contractual relationship with your company and a bank according to which funds received from your sales and paid by credit or debit cards are given and sent to your business account.
A payment processing company or a bank will give a unique merchant ID number to your company and your bank account in order to exclusively identify your business amongst billions of others spread all over the world. Merchant ID is mentioned in every online payment that takes place on your website.
When you apply for a merchant account, a bank or a processing company will evaluate your application taking into account the type of goods or services you’re giving on your website, planned total sales, origin countries of business processes and currencies of payment cards which your customers will use.
There are many fees connected with a merchant account such as monthly minimum, transaction fee, chargeback fee, and some others. It is important to know all the fees of a merchant account in line to secure a business will be profitable and worth your time and effort.
Now, What is Different About 3rd Party Payment Processors?
Now I explain a little bit about 3rd party payment processors, They use one merchant account to serve different merchants that are opposed to the traditional way – a dedicated merchant account to every merchant. In other words, payment aggregators receive payments on account of a number of e-commerce merchants.
If you are a new company or a startup – third-party payment processors are simple to get started to accept payments from online. There is no need to get the necessary documentation for starting a new merchant account and a payment gateway because of all of these you can have with 3rd party payment processors easily. As for the pricing policy of such payment services, in most cases, you pay when you sell something online. You should Google and look up several top 3rd party payment processors to find which one is best for your online business.
As a practice, hosted e-commerce practices support a long list of different payment gateways which will include those of third-party payment processors. So Google to check out these services and which is better for you. Hope this article is useful to you.