Online Payments: How The Payment Process Works

If you’re thinking about the best way for your business to take money online, we’ll be posting a series of tips on accepting online payments over the next few weeks from Lucy Langdon. How The Payment Process Works

Let’s assume you’re now convinced that you need to set up a payment facility on your site. Hold your horses. There’s a lot more to taking credit card payments online than simply designing a shiny ‘Buy Now’ button. Here’s how the process usually works:

  • The way your website gets customers to the virtual checkout is up to you. Ecommerce sites usually have what’s called ‘shopping cart’ software, which allows customers to add products to a basket as they browse and then navigate to a checkout. Whatever the method, as soon as the customer clicks ‘Buy Now’, they’ll be taken to a secure webpage (with what’s called an SSL Certificate) where they will enter their card details.
  • These details are then whisked away by a ‘Payment Gateway’ – a kind of mediator between the different banks. It will send the payment request to the customer’s bank and to your merchant account and then, if all is well, will facilitate the actual transaction.
  • Information about all this will then be sent back to your website, and, if all’s well, your customer will receive that cheery ‘Congratulations. Your payment has been accepted!” message.

This is the standard online payment setup, but there are obviously variations available, one of which might be more suitable for your business. I will talk more on this next week.

Lucy Langdon works for Merchant Account Forum, a website that helps visitors find the right merchant account for their business, including UK merchants & international merchants.

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