How Does Payment Processing Work?

E-commerce payment processing can be especially confusing for many merchants who are just starting their businesses. The more you know about how it works, the better you will be able to choose a payment processor that’s a good match for your business. Knowledge is power, especially for many high-risk merchants. So how does it work? These are the six basic steps involved in an e-commerce payment:

• Trigger the transaction – The customer selects a product and submits their credit information
• Open the gates – This information passes through a secure payment gateway
• Ask the issuer – The payment processor asks the credit card issuer to review the transaction details
• Authorize and advance – The issuer authorizes the request if it’s legitimate and deduct the payment from the customer’s account.
• Approve the move – The payment processor notifies the merchant that the issuer has confirmed the transaction
• Credit the account – The funds are transferred to the merchant’s account

Other things to keep in mind
When customers submit their payment information, they are taking a leap of faith that the transaction will be safe and that their data will remain secure. It’s up to merchants to make sure that happens.

For an e-commerce store that people really trust, you also need to have good security measures. Make sure to use SSL certificates and adhere to Payment Card Industry Data Security Standard, Sitepoint suggests.

Another tip is to not to maintain customer data, especially credit cart numbers, CVV2 numbers and expiration dates. If this information is hacked, customers could experience negative consequences and they may even trace the problem back to you.

Sitepoint also suggests installing security patches on systems consistently, whether the software in question is WordPress, Magento, Java or Python. When sites are breached, it often happens because the company is running an old version of software.

Performance Card Service works with merchants to help them set up payment processing and understand the details that are important to improving their business.

Also read: Why the payments you support (and how you support them) affects your conversion rate

This infographic was created by Performance Card Service.