In order to gain the customer’s loyalty, providing an ever-convenient payment system is crucial.
As an online business owner, providing customers with a safe and easy way to purchase online is one of the fundamental goals that help push the business for success.
Although the core goal of all payment processors is to enable customers to seamlessly make online purchases or payments, there are still features that are unique to each.
That is why it is vital to gain a thorough understanding of the functionalities of payment processors from start to finish. This also helps merchants to avoid pitfalls and allow them to make the most efficient choices to protect and improve the services of their businesses.
How Do Online Payments Actually Work?
Online payment involves two main players: The Merchant and the Customer. Merchants need to have 2 important elements in order to accept credit card transactions from their customers.
The two key elements are (1) an Internet Merchant Account (IMA) and (2) a Payment Gateway. In addition, incorporating alternative payment methods such as Paypal is important to accommodate customers who wish to use a different method of payment aside from credit cards.
Once all the important components are settled and in place, the online payment process goes as follows:
- A customer initiates a purchase from the merchant’s website by submitting their payment information.
- The information given is then sent to the payment gateway.
- Upon receiving, the payment gateway then encrypts the purchase data.
- After data encryption, the payment gateway shuttles all the data into a series of approved payment processors and networks for authorization wherein the payment is either accepted or declined by the bank.
- The results then ricochet back to the customer’s end notifying them regarding their purchase status. Take note that all the activities listed above can possibly take place in a matter of seconds.
- The sixth and final step takes place after the payment gateway sends out the transaction to the payment processors and the money is transferred from the customer’s bank account to the merchant’s bank account.
As the payment is transferred through different parties and varying providers, careful assessment is also being done to ensure the legitimacy of each and every transaction. This makes online payment processing a complex process done at a high-speed rate.
To maintain customer satisfaction, some payment solutions implement ways to make the entire process easier to manage. This can be achieved by offering a service wherein all the essential elements that a customer needs to pay online are bundled together into an all-in-one solution.
If a merchant already has an existing merchant account, some payment solutions allow them to use a gateway to accept credit card and in addition, it also enables them to choose an alternative option for payment methods.
After settling all the fundamental details of an Online Payment, the next key factor that must be addressed is for merchants to choose the most suitable online payment system.
There are, in fact, several different types of Payment Solution providers available. But, it is best for merchants to make sure that the said payment solution can provide answers to the following questions listed below before deciding to choose the best online payment system for their business.
- Is it Secure?
It is best to search for a payment solution that  is Payment Card Industry (PCI) compliant,  Bears a trusted name and most importantly,  operates with a system that has never been breached by cyberthieves.
- Is it Reliable?
Look for a system with round-the-clock availability with a trusty backup system in place. Check out user testimonials and reviews as well if there are any.
- Is it User-Friendly?
Make sure that the payment solution should be easy-to-integrate and flexible. It must also have accessible technical support and resources so that it can be easier to meet the merchant’s needs as the business grows.
Providing flexible and easy ways for the customer to make purchases adds a plus point for the business as well. These methods include payments via the merchant’s or a reputable eCommerce website, an online marketplace, transactions carried over-the-phone and even meetups.
As mentioned earlier, there can be a lot of payment solutions available. However, not all are created equally, and that is why knowing the ins and outs of each is a must.
Remember to look for a payment solution that can provide secure, reliable and easy-to-use features to continuously earn a good, lasting impression and positive feedback from customers. Implementing a seamless and secure online payment system helps businesses stand out among competitors.
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