Opening an online business has plenty of hidden costs, including processing credit card transactions. Website credit card processing services can range in price and accessibility. To manage processing cards on your own, you will need to build your website starting with four basic elements: a merchant account, a payment gateway, a payment processor, and an e-commerce system. Being prepared for your business’ success is the first step towards a better future for your business.
4 Elements Necessary for Website Credit Card Processing Services
Merchant Account
You will still need an external checking account for your business, but a merchant account allows you to accept payments via debit or credit cards. In most cases, you will be using the account of a merchant processor. You will enter a merchant agreement in order to use the processor for your business and you will be assigned an identification number or username. This ID or username will serve as your merchant account that will allow you to use website credit card processing services.
Payment Gateway
The payment gateway is the virtual credit card terminal that processes payments, either accepting or declining credit cards. The gateway is also responsible for retaining the necessary information to void or refund transactions. All customer information is kept secure through the gateway. Most gateways have software to run anti-fraud measures and address verification. The gateway is the only way of communicating with the processor about payment. The product cannot be released online unless its payment has been processed through the gateway.
Payment Processor
The processor is what the gateway is servicing. The payment processor handles transactions, sending them through to credit card companies and banks. The gateway sends the payment to the processor and the processor sends it to its next destination. If the card is from a bank, the card will be run through the bank’s system first for anti-fraud measures and to determine whether the card can be accepted or declined. The bank or credit card company’s processor sends a message back to the payment processor as to whether the payment was accepted or declined. The processor, then, sends the message back through the gateway so that payment can be completed. When you open a merchant agreement, you are agreeing to the payment processor’s terms. Your business’ agreement application will likely be sent to a third party for risk evaluation. The payment processor acts as the backbone of your business’ e-commerce.
E-commerce
E-commerce, in layman’s terms, is the virtual shopping cart or bag seen on every online retailer. Ready-made e-commerce systems are available for purchase or you can customize your own system to fit your business’ needs. When you chose your system, it will determine what kind of gateway you will be able to use on your website. Whether you have a physical location or not should also have an impact on your website design choices. If your business’ products are purely digital, you will not need certain features, such as address search capabilities or shipping requirements. Your choice of website credit card processing services will make your customers’ shopping experience smoother.
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