Online payment systems bring convenience to consumers the world over.
While innovations such as mobile payments allow customers to leave their cards at home, they still have to be present at the time of purchase. With online credit card processing, a shopper in Taiwan can buy a shirt from Canada without leaving her bedroom. The world becomes smaller, businesses can expand their reach and consumers have access to the products they want regardless of geographic location.
How online payment processing works
With online payment processing, a customer makes a purchase on your website, submitting their personal, payment and shipping information in an online form. The payment data is sent via a payment gateway to your credit card processor, who then transfers it to the customer’s issuing bank. It’s important to note that best practice dictates encrypting payment information before it is sent through the web. This is difficult for even large enterprises and takes a toll on businesses with limited resources. Therefore, it’s best to use a separate credit card processing company to handle encryption, data transfer and decryption.
The issuing bank receives the payment information and determines whether or not to authorize the payment. If the customer has the money in his or her account and the purchase didn’t trigger any fraud warnings, the bank approves the purchase and sends this information back to the payment processor through the payment gateway. The processor then sends this decision to your business, and your website alerts the customer as to whether or not the sale went through.
The importance of a secure, third-party payment processor
You might look over these steps and think payment processing isn’t any more difficult than running other aspects of a business, but the concept gets more complicated when security comes into play. Payment theft is a huge headache for nearly everyone involved – consumers, businesses, banks and card companies – so security can’t be overlooked.
As an international online merchant, you run the risk of encountering hackers from anywhere in the world. The best way to keep your customers’ data safe is to adhere to standards set by the Payment Card Industry Security Standards Council. These standards are incredibly comprehensive, but the best payment processors are dedicated to observing them. Not only does a third-party processor encrypt payment information so it travels safely, but those of the highest security level keep the data completely off your servers. This makes it much easier for you to comply with PCI standards, and you can rest easy knowing your payment processor takes full control of security.
A payment processor can also solve the problem of storage. Small and medium-sized businesses often don’t have the resources to store the card data of each and every customer they encounter, but a payment processor handles this problem with ease. Finally, credit card processors take away the difficulty of handling separate currencies. The best choices offer hosted payment pages, which solve the problem of localizing your e-commerce shopping cart and keeps shoppers on your website.
Brought to you by PacNet Services, your one-stop global payment processing solution.