Nowadays, even a small business can grow and increase its sales quickly with smooth online payment processing. Modern technologies, including bank payment processing, allow businesses to accept payments globally.
It is important to choose the right processor to set up efficient and convenient payment acceptance. But first, let's understand what a processor is and how it works.
Bank payment processing greatly simplifies paying for purchases online. Transaction processing occurs almost instantly, which is convenient for both the business and the client. The only thing needed is a proper network connection.
Bank card processing deals with the details of a cardholder when paying for various goods or purchasing services. In this case, the funds are debited from the client's card account, and after that, they are credited to the merchant account of a company providing services. This technology helps to process, verify, accept, or decline digital transactions using special hardware and software.
Online payment processing is executed via a number of digital gateways. If the transaction meets the requirements of each one, it moves on to the next one. The last gateway is the merchant's bank, where the money is deposited.
The structure of this process can be divided into 4 steps:
Usually, if there are no “red flags” detected by a gateway or a processor, authorisation is quick.
There are several parties involved in this process. We’ll describe them below.
A payment processor is a company that processes digital transactions made via credit and debit cards (e.g. Visa, Mastercard, AmEx) or alternative methods (e.g. Alipay, WeChat).
While processing centres analyse and transmit the payment data, payment gateways verify the correctness and security of all information and then accept or reject the transaction.
This party is represented by a bank that issued the plastic card and controls all the operations on it.
A merchant account is a bank account registered for a legal entity. It can be done with the help of a merchant services provider. It allows for accepting online payments from the clients. Funds debited from the purchaser's card go through the processing centre and then move to a company’s merchant account and, within 1-2 days, are transferred to the company's bank.
Plastic cards can be processed either directly by banks or by certain processing centres. The second option is preferable since it is more affordable and allows you to diversify your range of services.
A payment gateway with the ability to transfer encrypted data is required to process a transaction. This is necessary to protect the personal data of the bank's clients.
Ensuring security is the main condition in digital payments acceptance. Processing centers can also provide additional services to fully control the situation. These include:
The capabilities of processing centres are constantly increasing due to the use of powerful software and hardware systems.
A payment method is a way customers utilise to pay for goods or services online. The most used methods are bank cards, e-wallets, mobile transactions, and instant transfers. There also are dozens of other global and regional methods of receiving/sending money from a purchaser to a seller. In plain words, all these methods are the tools that every e-commerce market participant should have to communicate with each other.
Corefy has developed a fintech solution with customisable features for accepting online transactions. Our platform allows merchants to accept payments and make payouts through different providers. We help our clients conveniently and securely accept and make online transactions and monitor all data in a single platform.
