Online payment processing systems are very popular these
days. However, many people get confused with the anatomy or how things work in
such systems. It is important to understand how a transaction works right from
the start to the end. So, in this article we explain how these online payment services really work. This way, you will
be able to understand how your own website, customer or member, as well as
payment provider or service interact.
How To Get Started
In order to start with a payment solutions system, you need the following:
- Merchant account: which is enabled via some systems, although some systems such as PayPal do not require any merchant account and can even provide you with one.
- Payment service provider account – which you will need to get through your provider.
- A website or web page that has a button for payment donation or purchase – this will initiate the process of transaction, and you can use the code that is provided by your service operator or even your specialized software for shopping cart.
How The Transaction Begins
Once the website or web page has been set up, as well as
connected to a mobile payment gateway or payment
system that is online, the customers or visitors to your website will be able
to make payments online for services and products. The process for online
payment starts once the visitor clicks on the button in order to make the
payment online to register for an event, or for membership fees. It can even be
for a donation or for purchasing something online from your store.
Once the payment form online appears, the customer or
visitor will enter their information for their credit card online, as well as
submit the request for the transaction. It depends on who the service provider
online is, as depending on that, the form might appear on the website or your
purchaser might be redirected to a form on the service provider’s website. It
also depends on the online payment technology that
is used.
Once the transaction request is made, and the information
for the credit card is provided by the purchaser, this information is very
securely transmitted to the gateway that is operated via the service provider
for payment. The information is properly encrypted so that neither you nor
anyone else can view any of the financial or personal information of the
purchaser.
Once this information is transmitted, the service provider
will utilize a processing service for payment – which can be either one
provided by another company or their own – to ascertain the credit card details
of the purchaser. This is also done to confirm if the purchaser has enough
funds to complete this transaction.
If the credentials entered by the purchaser are valid, and
sufficient funds are there to complete the transaction, the service provider
for online payment services will initiate a funds
transfer from the bank account of the purchaser to the merchant account that is
linked to your own website. Then your website will be notified that the
transaction is approved.
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