E-commerce payment processing
What is an e-commerce payment processing
Online shopping is one of the most popular activities worldwide. According to the latest research, global e-commerce retail sales will reach $5.42 trillion in 2022, which means retailers are making the most of all e-commerce opportunities to grow their businesses. Whether you’re starting or already running an e-commerce business, setting up online e-commerce payment processing is essential for it to function effectively. A well-built payment platform expands the capabilities of any merchants around the world, allowing them to accept and process multiple payment methods and currencies, as well as manage digital transactions.
E-commerce payment processing is a must for all companies or stores that sell their products or services online. Merchants can’t receive transactions from customers without cooperation with a payment processor, which is in charge of fast and secure transferring of information between processing participants. Plus, considering the customer-focused nature of e-commerce, it’s essential to provide a better user experience through nearly limitless payment options, user-friendly checkout, improved data security and faster transaction processing.
How does e-commerce payment processing work
E-commerce payment processing isn’t as simple as it seems. It involves several participants, and each of them plays an important role. Let’s take a look at how an online credit card payment is processed from start to finish.
- After clicking the “Buy” button on the e-commerce website, a customer is redirected to the merchant’s checkout page, where they enter their credit card details.
- Payment gateway encrypts the received information and sends an authorisation request to the merchant’s acquiring bank. The gateway also sends another request to the card network serving the cardholder (Visa, Mastercard, or other).
- The card network authorises the payment and sends a confirmation to the acquirer, informing it of the amount to be debited from the customer's account.
- The issuing bank checks the customer’s account balance and sends the confirmation back to the network.
- The card network sends the approval to the acquirer and gateway.
- The funds are debited from the customer's account and credited to the merchant's account.
Considering the global reach of e-commerce, there’s a strong need for businesses to accept and process various payment methods, from traditional debit/credit cards to cryptocurrency. To do this, a prospective merchant needs to partner with a payment processing system for e-commerce who will furnish them with software and hardware to process transactions.
How to choose a payment processor for e-commerce
When it comes to choosing a payment processing system for e-commerce website, there are many factors you need to take into account that directly affect the user experience and, consequently, the bottom line of your business. Here are the key factors that can’t be neglected when choosing a provider:
PCI DSS compliance.
To protect customers’ sensitive information from breach or fraud, your payment processing solution provider must comply with each of the 12 clauses of the PCI standard. The integration of an unprotected platform or gateway can entail negative consequences and damage your store’s reputation.
Multiple payment methods and currencies available.
Buyers’ payment preferences are quite diverse, and the more payment options are available on your website, the more likely they are to make a purchase. Opt for a solution that supports as many payment methods and currency options as possible. Plus, there’s a great way to scale your business with currency conversion while minimising exchange fees.
The ability to customise your checkout page is extremely important for successful sales. To accept payments on-site, avoiding the risk of shopping cart abandonment, choose the service providers that offer a customisable API.
A well-known fact is that e-commerce businesses deal with plenty of customers and hundreds of transactions per day. Luckily, some PSPs provide various management tools for convenient and systematised business workflow.
How Corefy can help
A secure and efficient e-commerce payment processing system is a must for the fast-growing and highly competitive e-commerce industry. At Corefy, we provide businesses of all industries and sizes with a customisable payment orchestration platform supporting more than 400 payment methods and payout options and 200 currencies. Give it a try!
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