Choosing an Online Payment Processor

You must choose the right payment processor when you operate a business that accepts debit and credit cards online. Online payment processors handle all the work, from capturing sales to sending you a statement of your bill and collaborating with banks to ensure you get paid.

If a customer purchases products on your website or in person at your brick-and mortar store the credit or debit card data passes through a payment gateway or PoS terminal. The gateway encodes data to protect it and sends it to a payment processor, who then sends it to the card network of the customer. The card network checks with the client’s bank to determine if there is enough funds in the account to purchase the product. If the bank accepts the purchase the card issuer will transfer the funds from their account to the bank of the merchant. The payment processor will then transmit this information back to the merchant’s site or PoS terminal and inform the customer that their transaction was successful.

When selecting a processor, be sure to consider security and user-friendliness, and compatibility with existing systems. Choose a processor that offers APIs and plugins to seamlessly integrate with your e-commerce platform or the POS system. You should also assess the checkout experience of your customers and your team’s reporting and management experience. Not least, ensure you understand the contract and how it is possible to switch providers in the future.

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