Payment Processing

The Importance Of Online Credit Card Processing In Digital Business

As a merchant, you have already experienced how things can get changed amid the crazy pandemic situation. People are not coming out of their house and therefore, the graph of the cash flow of the brick and mortar business is going down. Living in this advanced era, people are choosing smart ways to shopping. Yes, everyone has mobile phones and computers and so, consumers are going with digital marketplaces. Anyway, when it comes to operating digital business, merchants need a safe, secure and robust payment processing system. There are many merchant processors that are coming up with a secure online credit card processing system. Merchants will find positive as well as negative things and therefore, depending upon your requirements, you should choose a payment processor for your business.

Anyway, before letting you know about the best merchant processor for your business, we should tell you how this online credit card processing works.

How Online Credit Card Processing Actually Works

Most merchants in this modern era do not yet know how this credit card processing service actually works. This is why most merchants are hesitating to embrace this advanced payment system. Anyway, this is a complicated process and we have made a brief breakdown for you. This explanation will definitely make you a payment expert in no time.

Core Steps Of Online Credit Card Processing
  • Purchase Phase: Once the buyer is ready to make payment, he or she clicks on the ‘pay now’ button. After that, they are redirected to the checkout page where they provide their card information. Now, during this purchase phase, it is very essential to provide a localized experience in order to mitigate the number of checkout abandonment. Top payment processors detect the unique IP address of the shoppers in order to serve up the appropriate language and currency type. This personalized experience basically enhances the confidence of the customers. As a result, merchants see a huge rise in the conversion rate. The online payment gateway captures the encrypted credit card information. Security is very important throughout this payment process.
  • Routing And Processing Phase: In this step, the acquiring bank gets the authorization request from the online payment gateway. It is basically routed from the payment gateway to the bank. The merchant bank basically processes the credit card payment on your behalf. After that, the merchant bank sends the transaction details to the issuing bank or shopper’s bank for approval.
  • Approval Phase: Now, the issuing bank has two options. The issuing bank can approve or deny the transaction. Now, the bank makes a decision on a number of factors such as available funds, currency mismatch, transaction value, and many more. Top payment processors use intelligent routing that basically mitigates the number of failed transactions. It can increase the overall sales by 17%. However, after making the decision, the issuing bank sends the information to the acquiring bank and the merchant processor gets the information from the acquiring bank. You might be surprised to know that the entire online credit card processing happens in real-time.
Additional Steps
  • Shopper Result And Confirmation: At this point, the shoppers get a notification regarding their payment. They will get to know whether the payment is successful or not. On the other side, the merchants also get a notification from their credit card payment processor. After that, you can start fulfilling the order of your customer.
  • Fulfillment: If the transaction is approved, you will deliver the product or service to your customer.
  • Settlement And Payout Phase: During this phase, the issuing bank will send the funds to the acquiring bank. Now, depending upon the number of overall monthly or weekly sales, the pay-out system, and many other factors, the acquiring bank will make a deposit to the merchant.
  • Reporting And Reconciliation: Reporting and reconciliation phase is very important as well as complicated. If you want to do it by yourself, you will definitely face problems. Fortunately, merchant processors offer payment reporting. Now, some merchant processors send multiple reports whereas some renowned payment processors offer consolidated reports.
Advantages Of Online Credit Card Processing

As of now, you have understood how online credit card processing service works. Now, if we talk about the benefits, well, you will have endless benefits. First of all, enabling this service will increase the overall sales. As a result, you will see an increment in the cash flow. Moreover, this service will allow you to accept international transactions. So, you will have the option to deliver your product and service to international customers.

Not A Rapidcents Merchant?

Rapidcents is a renowned payment processor that offers services such as billing and invoicing, virtual terminal, online payment gateway and many more. If you want to enable the online credit card processing service, you need a reliable and well-known payment processor like Rapidcents. This virtual platform adds full value to each online transaction. So, do not just think; choose this platform as the payment processor for your business.

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