How Does Online Processing Work

At first glance online processing of credit cards can seem very confusing and overwhelming. There are so many unfamiliar words and terms you probably don’t realize that when learning about online processing in another way, with more familiar phrases, it is much easier to understand. You will see it isn’t at all as complicated as it may seem at first glance.

Let’s start with what your visitor will see when they are ready to pay via credit card on your website. There is usually a form to fill out where they will enter their credit card information. When they have chosen their product, filled in their information and seen the total price with tax, shipping and handling, they will press the “submit” button and the first step is done. This is called the visitor front end process.

As soon as your customer presses the “submit” button, it changes to a back end method of online processing. Your customer’s credit card will be checked and made sure it is valid. It will also be verified as their card and instantly checked against their address and other personal information on file with the credit card company. This helps eliminate fraud and the processor will immediately let your website know if something doesn’t check out. This step is referred to as the payment gateway.

From the payment gateway, online processing moves on to a special bank account called a merchant account. You can have your own merchant account or use another one, such as PayPal, which is a popular way to accept money online. The money is taken from the credit card company and placed into the merchant account. This completes the initial online processing of the payment, but it isn’t quite done yet.

At this point your customer will receive an automated communication from you, usually in the form of a “Thank You” page on your website or an email with their order information on it. From the customer’s viewpoint, their role is now complete and they will wait for the arrival of their item. Right now the information and money is being temporarily held in the merchant account and information between the merchant account and your company will need to be synched. This gets quite technical and usually is left to the computer programmers to figure out. All you need to know is this process happens.

Finally, after all of those steps, you, as a business, will receive your payment from the customer and the online processing will come to an end. If the merchant account you have is owned and operated by you, the payment is usually instant from the merchant account to your bank account. If you go through a third party for your merchant account, you will probably get a lump sum every two weeks or once a month.  As you can see, online processing isn’t complicated at all. In fact, it is quite simple when you think about It and the whole process is usually done in seconds making is a fast, quick and easy process for both you and your customer.