Payment Gateways and ECommerce Merchant Accounts
By: Joe Cole
Posted: 2008-07-06 01:09:02
An eCommerce payment gateway is a web-based service that integrates into a merchant website's shopping cart and transmits the payment information that customers enter in it. It serves, for virtual storefronts, the same purpose that a physical terminal does for brick-and-mortar businesses. It supports the full range of processing services: authorization only, authorization and capture, refunds and voids. Every major eCommerce gateway offers a virtual terminal option which allows merchants to enter in a browser the payment information as they are completing a transaction over the phone or have received a payment slip over the mail. Every credit card merchant processor has now incorporated into its payment gateway a suite of fraud prevention tools and supports AVS and CVV2 verification services.An online payment gateway is a part of every eCommerce merchant account, just as a swipe-through terminal is a part of all retail merchant accounts. Both solutions facilitate the capture and transmission of credit card payment processing information from the merchant to its small business merchant accounts provider. Yet, there is more to every merchant account processing service. Once the information is sent to the processing bank, the transaction has to be authorized, cleared and settled, in order to be completed. This whole process, from capturing of the information, to the settlement is what a merchant account service provides. Here is a detailed description of the process: 1. A card holder presents a card to pay for a purchase.
2. The merchant processes the information and requests an authorization from its processor.
3. The merchant bank submits the request, through the Credit Card Association of Visa or MasterCard, to the card issuer.
4. The card issuer approves or declines the transaction and sends its response, through the Credit Card Association of Visa or MasterCard, to the merchant bank.
5. The merchant bank forwards the response to the merchant who completes the transaction accordingly.
6. In the case of an approved transaction, the merchant deposits the receipt with its merchant bank.
7. The processor then credits the merchant's bank account and submits the transaction to the Credit Card Association for a settlement.
8. The Credit Card Association then pays the merchant bank and debits the card issuer account.
9. The card issuer posts the transaction to the card holder's account and sends him or her the monthly statement.eCommerce GatewaySmall Business Merchant Accounts
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