There is quite a bit that goes into setting up a business to accept credit cards online. Between creating an eCommerce site for your business, marketing your online availability and trying to navigate payments from the hordes of customers coming to visit, it is a deluge of responsibility. A payment processor like Payline can ease some of the workload of setting up your ability to accept credit cards online and maintaining all payments to your business, but no merchant should go into this relationship blind, and it’s important for business owners to understand payment gateways.
We have previously let you in on some of the secrets of online payment processing, like how to choose an online payment processor for your business, ensuring a transparent payment processing experience, and more helpful information on our blog. With all of this information, it can be helpful to break some of it down into bite-sized pieces to make it easier to process (little Payline pun!). As eCommerce is a popular form of business, we can clarify a couple of concepts you will come across when you accept credit cards online.
When you work with a payment processor to accept credit cards online, you will hear two terms frequently: payment gateway, and ACH payments, or Automated Clearing House payments. When your business wants to accept credit cards online, these terms are part of what goes into the process, and rather than just have concepts and information thrown at you, here’s a quick overview of what you should know about them.
To understand payment gateways you need to know that they are required for eCommerce sales. It is the system that securely authorizes credit card payments and allows your business to accept credit cards online through a merchant account. Payment processors like Payline offer simple-to-use payment gateway service for your eCommerce site. While the actual process of using a payment gateway to accept credit cards online takes only seconds from a consumer and merchant perspective, there are a few steps taking place in those seconds after a customer clicks “Order”.
Encryption: The data the customer provides is encrypted (i.e. converted into a secure code) by the web browser, and then the gateway transfers the transaction data to the payment processor that is used by the merchant’s acquiring bank.
Authorization: The transaction data is sent out by the payment processor to the card company as an authorization request, and the issuing bank either authorizes or denies the transaction.
Order Filling: The authorization is processed and sent to the payment gateway. The gateway transmits it to website, whereupon the merchant completes the order for the customer.
You need to understand Payment gateways (as it’s vital to accept credit cards online), but you should also be aware of what ACH payments do in this scenario. Acronyms in the finance industry may seem intimidating, but an ACH payment is simply an electronic payment transfer from one bank account to another. In other words, you can fill out bank information in order to make a payment.
ACH payments have many uses, such as paying a service provider or transferring money from employer to employee. Businesses that accept credit cards online can benefit from ACH payments because it costs less to accept credit card payments than other methods, like paper checks. It is also helpful when collecting recurring payments.
When it comes to payment processing, you should be as much in the know about the terms and processes as your provider is. Your business can go far by adopting eCommerce and accepting payments online, so ask questions, do your research and accept credit cards online.
Payline will always make sure you know everything necessary to make using a payment gateway as seamless as possible when you accept credit cards online.
This piece was written by Lauren Minning, Content Specialist for Payline.