Payment processing software is the one that merchants and customers use to make debit and credit card purchases. The days are gone when businesses use cash or checks for any kind of payment transfer.
Online retailers must adjust to the increasing use of mobile payments as well as digital wallets. Different online payment platforms are gaining importance day by day due to the high rise in technology as more and more people are likely to use digital means for any kind of transaction.
Payment processors accept payments by undergoing a series of payment gateways and approvals.
Three key players are involved in payment processing. Understanding the roles of each of them will help you to comprehend how payment processing actually takes place.
1. The retailer:
Since the business is hosted on the internet you'll have to figure out how to accept credit and debit card transactions. For this, open the account of a merchant banking institution that accepts payment on behalf of your company and transfers the funds into a merchant account.
2. The customer:
Customers are essential for merchants to generate sales. The only way for customers to purchase items from an online shop is to have funds. Customers need to be approved by the bank that issued either a credit or debit card.
3. The technology:
Technology facilitates transactions between the seller and the buyer. The credit card or debit card data is sent via a payment gateway and then it goes through the payment processor to conclude the transaction.
The processes of the payment industry shift with each passing day. Within a decade, the world has changed from using credit cards to storing information about cards using payment processors to facilitate payment, or even paying through mobile.