From a customer\u2019s point of view, making payments by credit card is pretty straightforward; it\u2019s even easier than paying cash or writing a check. But drill down into the details, and you\u2019ll find that a complex series of interactions between various entities is at work. Credit cards have been around since the mid-1900s, and every year they become more sophisticated, convenient, and secure. Payment processing has also evolved over the years.<\/p>\n
To better understanding how credit card processing works, you need to understand the terms used and their significance. What are the differences between payment processing, payment gateway, and payment facilitator? Sometimes the terms can be confusing.<\/p>\n
When customers initiate credit card transactions on your website or at your POS (point-of-sale), several resources cooperate in processing the transaction and moving the money from the customer\u2019s account to the merchant\u2019s.<\/p>\n
If you as a merchant have contemplated accepting online payments, now is an excellent time to start. More and more consumers and businesses are conducting the majority of their business online, and the trend is sure to continue.<\/p>\n
If you choose to accept online payments, you\u2019ll need both a payment processor and a payment gateway. The two are often spoken of interchangeably, but they are, in fact, different.<\/p>\n
A payment processor manages the credit card transaction process by mediating between the merchant and the financial institutions involved. A processor authorizes transactions and facilitates merchants getting paid on time by seeing to the transfer of funds. In addition, the payment processor will also provide payment terminal equipment that is used to accept the credit cards.<\/p>\n
The best payment processors will support credit card payments and a variety of other payment methods. Through interchange optimization<\/a>, payment processors can reduce the cost of credit card acceptance.<\/p>\n On the other hand, the payment gateway is the technology used by the merchant to accept payments from customers. The term includes the physical card-reading devices used in\u00a0retail stores as well as payment processing portals used in online stores. Payment gateways can now also accept phone-based payments using QR codes.<\/p>\n The payment gateway maintains a secure connection between the merchant\u2019s e-commerce site and the payment processor. It encrypts credit card data, verifies authenticity, and ensures delivery.<\/p>\n So, in a nutshell, the payment processor is the service provider who expedites the transaction; the payment gateway is the secure communication channel used to transmit payments.<\/p>\n For purchases made at a physical location, the POS terminal supplied by the payment processor is all that\u2019s needed to verify the authenticity of a card. If the card is not present, such as with transactions over the phone or by email, the payment gateway will authenticate the card before securely sending its details to the processor.<\/p>\n Payment processors will often bundle all the services a merchant needs to accept payments, including equipment and support. Often the payment processor has a propriatory gateway to they can control transactions from beginning to end.<\/p>\n Merchant accounts\u00a0are bank accounts used for accepting credit card payments. You can open a merchant account with your bank, or your payment processor can provide it along with the other services they offer. Sometimes different collection methods call for individual merchant accounts. Be sure to work with a payment processor that will support all the payment channels you choose.<\/p>\n Of course, you need an e-commerce platform (your website or e-store). You\u2019ll also need to partner with a payment processor who can provide a payment gateway and help you set up your merchant account.<\/p>\n Versapay<\/a> is a total merchant services provider. Our team makes it easy to get you up and running by providing everything you need to start accepting online payments right away. At Versapay, we pride ourselves on security, speed of delivery, and customer support. We can\u00a0 help you handle all your payment processing needs such as invoicing, e-commerce, card-not-present, and point-of-sale. And it will all be seamlessly integrated with your ERP solution.<\/p>\n Make the move to electronic payments easy and give customers the payment options they want.<\/p>\n If you\u2019d like to know more about our approach, contact<\/a> Versapay, and let\u2019s talk about setting up better payment methods for you and your customers.<\/p>\n Are you interested to get the latest on product releases and best practices from Versapay? Sign up<\/a> to Versapay's newsletter and be the first to hear about\u00a0exciting new product features and announcements.<\/p>\nPayment gateway<\/strong><\/h5>\n
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How to get started accepting online payments<\/strong><\/h5>\n
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