Ecommerce Payment Processing The Know Everything About

Opening an eCommerce site is always exciting. Once you build your site and decide what product you want to sell, the next step is to look for eCommerce payment processing. To run your business smoothly, you ought to need a way to authorize and process credit card payments.

Streamlined eCommerce payment processing that fits your and your customer’s need can be a game changer. It will deliver your customer a smooth and secure checkout experience, resulting in increased sales. It will also help you reduce shopping cart abandonment, improve customer experience, and lower costs.

For any merchant, it is crucial to understand how eCommerce payment processing work for their online business. But, to be honest, if you don’t know much about the technical things, it is difficult to understand the whole eCommerce credit card process and also hard to navigate.

In this blog, you will learn how eCommerce payment processing works, what you must consider while choosing eCommerce payment processing, and many more.

What Is Ecommerce Payment Processing?

Ecommerce payment processing has grown in popularity due to the extensive uses of online shopping. It is the process of accepting payment online.

Ecommerce payment processing is a simple process that happens when an online business accepts payments from their customer. It simply takes the customer’s card information from the payment gateway and verifies whether it is true or not. It also checks whether or not the customer has sufficient funds in their account. The process is done through a secure gateway that protects customers’ sensitive information and creates a safe path for transmitting the funds to the merchant.

Ecommerce Payment Processing Has Three Main Elements, Including –

Payment gateways: Act as a bridge between the eCommerce sites whether customers enter the details and your payment processing. The payment gateway is integrated into eCommerce websites through which customers can make online payments.

Payment processor: It takes the information from the payment gateway and verifies whether the customer has sufficient funds or not. If the customer has enough funds, it transmits them through the secure network and deposits them into the merchant account.

Merchant accounts: Here, the merchant receives the funds once they are processed.

How Does Ecommerce Payment Processing Work?

Now you know the essential elements of eCommerce payment processing. Let’s check how the whole process works together to complete each transaction.

Step 1: Open the payment gateways

At first, customers must have entered their credit and debit card details.

Step 2: Communicate to the payment processor.

As soon as the customer clicks the submit button, the card details are encrypted and sent to the payment processor via the payment gateways.

Step 3: Authorize or rejects

At this stage, the customer’s credit card issuing bank either authorizes or rejects the payments. The payment processor communicates with the customer’s card issuing bank to check whether the customer has sufficient funds. Suppose the customer has enough funds, then the transaction will be authorized. In case the customer does not have enough funds, the transaction will be rejected, and notified the customer as well as the payment processor.

Step 4: Notify the successful transactions

The payment processor informs the payment gateway about the approval or denial. Whether the transaction is successful or denied, in both cases, the merchant’s websites receive the notification from the gateways.

Step 5: Credit the account

The payment processor deposits the funds to the merchant account. The customer receives the confirmation mail if the transaction is approved.

Do You Need a Merchant Account For Your e-Commerce Sites?

Due to the increased complexity and modernization of eCommerce, most enterprises recognize the need for the eCommerce merchant account to enable them to customize their offerings to consumers’ expectations.

For your eCommerce websites, a merchant account can assist you in providing the appropriate digital payment options or alternative payment options for your customers. As you know, most customers nowadays prefer alternative payment options to online payments. So, including this option is essential and will help you increase your sales.

Merchant accounts can also help you to manage and reduce the cost related to the payment gateways.

Finally, eCommerce merchant accounts are committed to making their services highly secure and now handle payments using the most significant level of encryption. By doing this, you, as a merchant, can ensure that you are giving your customers the most precise and secure environment for processing their credit card transactions.

Check Whether Your e-Commerce Payment Processing Fulfills These Four Criteria Or Not.

The most challenging work for any merchant is to select eCommerce payment processing. Nowadays, most fintech service provider is available. Before making a deal with the payment processing, make sure that your select service provider fulfills the following criteria –

Must have PCI compliance –

Nowadays, every fintech service provider is PCI compliant. But still, you ought to confirm that your service provider must comply with the PCI DSS (Payments Card Industry Data Security Standard). It helps to secure your and your customer’s sensitive data.

Before receiving the payment processor, ask your service provider about their approach to PCI compliance.

Instantcharge has Level 1 PCI DSS compliance. It is one of the best eCommerce payment processing service providers.

Must Create Tokens For Sensitive Information –

If you allow your customer to save their card details either for repeat purchasing or recurring billing, it is essential that your payment processor use tokenization. Let’s check how tokenization works.

The tokenization converts the account number into random tokens(a unique combination of characters and symbols) when the information on credit card or debit card details is captured. It protects the customers as well as the merchant from getting hacked. With this process, the hacker cannot steal sensitive payment information.

Various payment methods –

Having various payment modes is one of the essential features of any service provider. Always ensure that your service provider offers you all the payment modes your customer wants to use.

Most customer love to make payments via credit cards such as Visa, Mastercard, American Express, Discover, etc. Additionally, if you are selling the more expensive products, you might also consider the option – buy now, pay later.

Also, you should offer some other alternative payment methods such as net banking, e-wallets, mobile payments, etc. You should show your customers as many options as possible.

We recommend you go with the instantcharge, as it offers various payment methods and can accept all the major credit cards from all over the world.

Fees of the service provider –

These are the things that most merchants care about. If your business is small, you don’t want to pay a considerable amount for your payment processor. Right?

It is pretty challenging to understand the fee structure of the service providers. Each service provider has its pricing structure. This pricing structure also depends on what services your want and how many modes of payments you want to integrate.

Most of the service providers charge a percentage as well as a fixed fee per transaction. Some of the service providers also charge monthly fees instead of transaction fees. Also, there are some extra fees for chargebacks, disputes, international payments, etc.

Knowing your number of transactions per month help you to choose the suitable payment processor for your e-commerce businesses.

We suggest you go with the instantcharge, as it has reasonable fees that easily fit all eCommerce business models.


Final thoughts –

Now, you know what eCommerce payment processing is and how it works. To complete the transactions, the payment gateway, merchant account, and payment processor play an important role.

You clearly understand the available options to accept payment through your eCommerce websites. The more payment options you offer your customers, the higher your sales. Payments are the core components of your business success.

As a merchant, the price you pay for a payment processor is essential, but it is not only a factor. Consider all the features which we discuss above while selecting eCommerce payment processing.

Still, if you are confused, we suggest you go with the instantcharge. It is one of the best e-commerce payment processors, and it helps you to grow your business at a reasonable rate.

You can get all the details of the instantcharge with our expert. Contact us without any hesitation.

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