Online Payment Processing
When a customer purchases an item with a credit card, a two step process begins.
- The merchant or the website requests an authorization from the customer's
credit card account to ensure that the card is valid and the customer
has enough available balance for the purchase. The customer's bank sends
an authorization number back to the merchant or the website and the
order is "captured".
- The merchandise is sent, and the merchant informs the bank where they
have a merchant account. The bank deposits funds to the merchant's account
while the customer's account is debited for the amount of the purchase.
At that time, the customers' bank takes out the required fees and the
transaction is complete.
Credit cards are an important part of enabling Internet commerce. The easiest process to
integrate into an existing business is an off-line authorization and settlement process.
For more advanced web merchants who are processing more than 100 transactions per month,
real time credit card authorization becomes economical. With a link to a Processing Service
Provider such as AuthorizeNet, the website generates an authorization request
when the customer places the order.
If the merchant is selling hard goods which have to be shipped to the customer, the order
is saved securely for later settlement. Once the goods are shipped, the merchant can settle
the order, and the transaction is completed. If the merchant is selling downloadable media,
software, or site memberships for example, then the order can be authorized and settled in
real time, without any intervention by the merchant.
Payment Processing Services
Accepting Online Payments
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