Transactions with credit cards seem to be quite simple. They happen in seconds and result in a successful purchase for a client and a sale for the business. However, this process involves more than a few tools. They are combined in the payment processing. Money must be safe through all the procedures, that is why every merchant should open a merchant account.
When a credit or debit card is used to make a purchase, the transaction occurs electronically as a series of actions. Customers, merchants, payment processors, gateways, banks are the payment processing components. Let’s discover the steps of ordinary payment processing that take only a few seconds in real life.
Point of purchase
When a client initiates a purchase, they choose a payment method. A point of purchase can include:
- Utilizing debit or credit cards.
- Cash.
- Check.
- Money order.
Nowadays digital methods for payments are the most widespread among clients. Their market share has been steadily growing through recent years, making payment processing a highly demanding task.
Payment Gateway
To transfer money safely and securely to the merchant, a customer needs to provide their payment data, and this is where a payment gateway like Maxpay is utilized. The gateway receives the payment data, encrypts it, and sends it to the payment processor.
Payment Processor
This part of the payment processing system delivers data from the issuing bank of the customer to the merchant’s online account such as a Maxpay account. If the payment is accepted this information is also going to be kept here. So, the payment processor validates the security of the card and moves money towards the account of the merchant.
Issuing Bank
Each credit card is given by some issuing bank as a financial institution. The latter provides data about the validity of the card and the person who makes the purchase.
Merchant online account
At the last step of the payment processing, the money is moved to the merchant account.
It is worth mentioning that all these steps of the payment processing can be done separately or are provided in one place such as a Maxpay account. The latter becomes very popular in Europe as it provides high-quality services. Open a merchant account to enjoy e-commerce.
