A Look Into How eCommerce Software, Payment Gateway and Payment Processors Take Payments

Florence Carpenter

In essence, a payment gateway is a service provided by an eCommerce software provider that authorizes payments. A payment processor is the one that transmits transaction payment details to the relevant authorities. 

With the growing popularity of credit card payments and mobile wallets all over the world, ensuring that your eCommerce website is fully optimized for buyers is crucial. 

2019 statistics claim that 34.4% of online payments in North America are made up of credit card transactions. As retail sales rise even higher, it’s best to take a closer look at your site’s payment process. 

The Shopping Experience with eCommerce Software 

The most popular method for eCommerce shoppers is a shopping cart, which allows customers to add items and services to a virtual cart. Once they’re ready, they check out and input their payment details using a credit card or debit card. 

In order to keep this sensitive information secure, you should take steps to maximize your website security. This includes ensuring that your website is PCI compliant, checking whether it has data encryption, and using safe login screens. 

Main Elements of Payment Processing 

To clarify the payment process from start to finish, the key elements involve included the following terms: 

  • Payment gateways: Analyze and transmits payment data between your eCommerce website and your payment processor
  • Payment processors: Take payment data from the gateway, goes through the verification process to ensure that the funds exist, and deposits funds to your merchant account 
  • Merchant accounts: Where your business can receive funds from customers once they are processed

How Does Payment Processing Work?

Now that we’ve clarified the terms, here’s a quick summary of how the credit card payment process works online:

  1. Customer enters credit card payment information during checkout
  2. Payment gateway securely sends this data to the payment processor 
  3. Payment processor communicates with the credit card network to check if the funds are available
  4. Credit card issuing bank approves or declines the payment 
  5. Payment processor communicates the transaction results to the customer 
  6. Payment processor transmits funds to merchant account or merchant’s bank account

At the end of the day, providing users with a safe and seamless shopping experience can help you boost your sales. When it comes to choosing a safe and reliable online payment processor, it’s best to do your research and look at the features and price points of each option. 

For more guidance and recommendations, reach out to us at ProcessingCard today! 

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