A brief Introduction to Credit Card Payment Processing
Credit Card Payment Processing is nothing but the processing of the credit card payment involving verification of card and the consequent acceptance or rejection of the purchase made through that card. This process could be online or off line. The online ones are known as Online Credit Card Processing or E-commerce Credit Card Processing.
Methods of Credit Card Processing
One way of doing credit card payment processing is through merchant accounts. This merchant account facilitates the merchant in accepting payments made by the customers through credit cards. This process involves opening of a merchant account by the business owner through a Merchant Service Provider (MSP) or a Merchant Bank. This account is a payable account involving interchange fees (a percentage or per item charge)authorization fees, monthly minimum fees, state fees, charge back fees and batch fees.
This facility can be availed by the customers by two methods and they are:
1. Offline credit card payment processing involves telephone line, cellular service and wireless.
2. Online credit card payment processing is fast and secured. The verification of the credit cards are instantaneous and the consequent acceptance or denial becomes fast. This process is known as Real Time Credit Card Processing which gives mileage to the merchants in closing the deals fast.
Credit card is swiped by a merchant in his terminal and the informations in the card are passed to the main processing unit for verification in order to charge the card. This transformation of payment information either takes place through telephone lines, or cellular services, or wireless or Internet.
E-commerce ASP Service is another form of payment verification which now-a-days are located in almost all business points. It is same as the Point-of Sale terminal. Application Service Provider or ASP is a typical and advanced computer based business which provides network-based services to the customers. This form of Credit Card Payment Processing is known as Payment Gate. It is a third party service where verification, acceptance or declination of any credit card takes place online. It is also known as IP payment gateway. The entire process is done on an online real time basis . Sensitive informations are encrypted (for example, credit card number) in the terminal. This provides a secure information passage between customers and merchants. Payment gateway helps in secured, secret and quick transferring of informations between payment portal (website) and acquiring bank or company.
Conclusion
Credit Card Payment Processing is one of the most important factors of credit card market and is awaiting more technological advancements for faster transformation of payment informations to give businesses the required competitive edge.