Payment Processor

Payment Processor

Payment Processor

Payment Processor: Everything you need to know about it

A payment processor is one topic business owners should know about as this involves dealing with sensitive financial details of the buyer and the business owners as well. So, it is extremely important for business owners to know the meaning of payment processors so as to make the right decision when choosing one for their business.

This post covers everything you need to know about payment processors. Enjoy it!

Meaning Of Payment Processor

A payment processor is a platform (mostly a third party) that handles financial transactions from numerous channels for merchants. The payment processor gets information from the buyer’s card to the merchant’s bank and the buyer’s bank. If the buyer has enough funds, the transaction will be processed.

There are lots of fees and features of a payment processor. The fees include transaction fees, set-up fees, lease charges, etc. for the features, we have the security features (always choose a payment processor with a strong security level to help protect you from fraudsters), customer care help, numerous currency support, numerous language support, etc. In most cases, a third-party payment processor is used by merchants for receiving payment online.

Most times, a payment processor is being used in place of acquirer or payment service provider.

However, let’s get to know the meaning of Payment gateway/payment service provider and merchant account to make the content easily digestible for you.

Meaning Of Payment Gateways/Payment Service Provider And Merchant Account

Let’s get to know the meaning of Payment gateway/payment service provider and merchant account.

A payment gateway is a technology that serves as a middleman between a business owner’s account/third-party payment processor and the credit card company. This is software that takes care of the technical side of payment for business owners. Without a payment gateway, you can receive payment from your online store; hence, this is one of the most important aspects of your online business you have to pay attention to.

A merchant account is similar to a bank account but this account enables businesses to receive and process e-payment card transactions. Without a merchant account, you won’t receive payment from your online shop, so it is very important to get a merchant account with the best payment service provider around to make payment easy for your customers.

To properly manage the payment process, you have to consider these factors. While the bank keeps the fund in the merchant's account before it is being transferred to the merchant’s business account, the payment gateway takes care of the transfer process, and the payment processor secures and confirms the transaction.

However, all these processes must be carried out properly for businesses to receive their payment.

How payment process works

The payment process cycle is a bit complicated for most people. So, let’s simplify the whole process for you. The guide here helps you to understand the whole process from the buyer’s first step to the point where the fund is deposited into the merchant’s account.

  • First, the customer fills in his details on the checkout page; and then he chooses to pay with any card of his choice like debit or credit.
  • When the financial details get to the merchant’s side, the information will be transferred to the payment gateway.
  • Now at the payment gateway; when the payment gateway receives the information, they will transfer the financial information to the merchant's third-party payment processor.
  • Now, the payment processor will take the transaction details to the card company (Master card or Visa card).
  • To know if there is enough money in the buyer’s account for the transaction, the card company will take the transaction information to the buyer’s bank.
  • After that, a message will be delivered to the card network stating that the transaction has been approved or declined.
  • The message is now transferred by the card company to the payment processor. From the payment processor, the message will be transferred to the payment gateway, telling the buyer and business owners the response.
  • Finally, the money will be deposited by the buyer’s bank into the business owner’s (merchant) account. The money will be there for some period of time before being paid to the merchant's bank account.

Payment processor: how to choose the right one

Payment processors are extremely important for online business owners that want to accept payment from their ecommerce shop. However, you have to consider some important factors before choosing the right one for your business. Below are some key factors to consider when choosing the right one:

  • Security: before choosing any payment processor, make sure you check the security level, as a payment processor with a poor security level will expose your details and your customers’ detail. Make sure you choose a payment processor that complies with the PCI standard.
  • Compatibility: Always try to use a payment processor that is compatible with your ecommerce shop builder.
  • Fraud prevention: Go for an option that has fraud prevention tools to avoid being defrauded online.

Scroll down to read our indepth Payment Processor Platforms guide. What you should know, Payment Processor Platforms features, price plans and support. Pros and Cons of Payment Processor Platforms as a payment gateway, everything is explained below.

Overview of Payment Processor

Spreedly is a software company that specialises in payment-gateway software for small to enterprise level businesses.

Spreedly is listed as the best payment-gateway software related to Payment Processor Platforms. Spreedly was founded in 2008 in Durham, NC and currently has over 79 employees registered on Linkedin.

Best PAYMENT GATEWAY Solution By Rating

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