Today, almost every business owner needs an online presence if they want to access the best possible revenue for their company. People across the globe are shopping on the internet more frequently than ever before, and the process of moving a business online for many organisations will now begin with understanding the ins and outs of card processing in the eCommerce world.

While processing a credit card payment might seem simple enough from the customer’s perspective, as all you need to do is pay for an item, go through the shopping cart, and enter your numbers, the process is far more complex from the other side of the fence. Here, we’re going to look at some of the most common ways that card payments can be processed.

The Traditional E-commerce Route

On the “front” end of a website, everything is designed to make the payment process appear as simple as possible. There may be a single button or form on a website where a customer submits payment details and pays within a matter of seconds. On the other side of things, however, a merchant needs to ensure they have a special bank account available to receive those funds and hold them until they can be transferred into his or her business account.

The “special” bank account that merchants use is otherwise known as a “merchant account”, and it allows for the acceptance of various forms of credit and debit card payments. A payment processing company or bank will assign a merchant with their own unique identification number so that they can use that to identify their business from billions around the world. Your merchant ID will be present on every payment taking place with your website.

When you’re applying for a merchant account, your processing company will review your application, and look at the types of service or product you sell, as well as your planned sales, and other useful information. There is a range of fees associated with your merchant account, including transaction fees, monthly minimums, and chargeback fees.

The Payment Gateway

In some cases, a merchant might choose to use a secure third-party service where they can authorise and verify payments that are sent to an account. This is a solution that’s more specifically designed for the modern digital world, and it can be quite popular among eCommerce companies around the globe.

Payment gateways are simply software that is designed to connect your merchant eCommerce website to your bank account. There are many different solutions out there to choose from, but it’s important to remember that you will still need a merchant account if you wish to use this system. Payment gateways work in a way that’s like the standard card terminal in a point of sale service. They:

• Make sure that a card is valid and authentic
• Look at the bank that issued the card
• Makes sure the numbers on the card are encrypted
• Tell a merchant bank where funds should be transferred
• Send all the valuable information you need back to your website

Third-Party Payment Processing

If creating a merchant account doesn’t seem to be the right strategy for you, then there’s always an alternative option available for today’s digitally-focused environment. Third-party payment processors are a new and enhanced solution for the modern way of accepting payments.
Mastercard and Visa are currently known as the largest processing platforms for payment in the world. They’re designed to speed up the payment cycle between banks, and act as a mediator between acquiring and issuing banks who need to authorise different debit and credit card transactions. A buyer and seller can use the services of different banks across countries, as there are thousands of different systems linked up to the same processing platforms.

Third party platforms for processing, such as Stripe, or PayPal give companies access to services that will allow them to facilitate the acceptance of online payments without the need for a merchant account. This solution makes life a great deal easier for online businesses and eCommerce companies who want to ensure that their customers have the simplest solution possible for sending payments for a product or service.

If you’re running a start-up business, third-party processing services make it easier to get set up and started with accepting payments online. You don’t need to go through the complexity of gathering important information to start accepting payments, and you don’t have to worry about getting accepted for a merchant account with a bank or account provider either.