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    HomeFinancePayment processing: everything an online business owner needs to know

    Payment processing: everything an online business owner needs to know

    The ability to accept payments is crucial when designing an online store. It describes the steps taken by your merchant bank when consumer payments made online are transferred to your account.

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    With the help of the payment processing network, online shops may quickly and easily take credit card or crypto payments from customers. Read on for a complete description of the parties involved, and how online payment processing works.

    The Meaning of Payment Processing

    Payment processing is the mechanism by which a payment made by a client on your eCommerce website finds its way to your account.

    To successfully complete a transaction, numerous entities must collaborate to verify the customer’s financial stability, collect payment information, and provide it to the merchant.

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    Which Parties Are Involved in Processing a Payment?

    In a payment system, the following entities are involved:

    • Someone who places an order on your website and pays for it using a debit or credit card is a customer.
    • Merchant – the company (you) that delivers the product or service and wishes to accept the debit or credit card payment from the client.
    • The term “payment gateway” refers to the encrypted link between your website’s shopping cart and the payment processor.
    • The payment processor, also known as the payment service provider (PSP), verifies with the issuing bank whether there is sufficient money in the customer’s account to cover the cost of the transaction. It’s fairly uncommon for a business’s bank to also act as its payment processor.
    • The bank from which a client receives monies is known as the “issuing” or “customer” bank.
    • The financial institution into which a merchant deposits the earnings earned from the sale of goods or services is known as the acquiring bank or simply the merchant bank.

    Quick Reminder: You can learn how to make your crypto payments truly secure and anonymous at BitHide.

    How Does Credit Card Processing Function?

    Transferring money from a customer’s bank account to a merchant’s involves many steps. It takes seconds.

    How internet payments work:

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    • Your consumer buys something and checks out.
    • During checkout, users provide financial information and choose a payment method, such as a credit card, debit card, bank transfer, or any method your payment gateway permits.
    • Before forwarding to the payment processor, the gateway encrypts consumer financial data.
    • Payment processor notifies card issuer (i.e. issuing bank). This verifies the customer’s payment information and ability to pay.
    • The payment processor will know whether the bank approved it.
    • Your merchant account shows gateway success.
    • The issuing bank funds the purchasing bank’s merchant account.

    The Difference Between a Payment Gateway and a Payment Processor

    The payment gateway sends customers’ financial information to the payment processor. It allows merchants to accept credit and debit cards, bank transfers, eWallets, and other payment methods.

    The payment processor receives encrypted transaction data from the payment gateway and sends it to the credit card network and issuing bank for authorization. It helps the acquiring bank, issuing bank, and merchant exchange information.

    Sometimes the same company offers payment processing and the online payment gateway. Your bank handles payments. Your website’s eCommerce platform may support the payment processor.

    Want to know more about Bitcoin payment gateway? Follow the link: https://bithide.io/bitcoin-payment-gateway and learn how to anonymously accept payments on your site in bitcoins today.

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