HIGH RISK MERCHANT ACCOUNT SPECIALISTS
By Aditya WilliamsComments Off
Payment gateways are very important when it comes to the system of online payments. If you end up using the wrong kind of gateway when you are dealing with your customers, it may have an adverse impact on the entire process. You must select a payment gateway according to the type of business you are dealing with and what exactly your business may require at that moment. It is very essential for you to learn the important role that the payment providers play and as a trader, you must know all about it.
This world is working on the basis of networks that are created due to the connections between people. These connections are a result of middlemen being involved. People don’t realize how indispensable this middleman system is. Many middlemen have said that in this world, the ones who actually encourage and become a source of these connections are the real players. The middlemen increase the value of a network by connecting the people that are a part of it. This article will mainly focus on one middleman that aids connections in the online payment industry. When a person is doing an online transaction, he or she will demand reliability and dependability. Let’s focus on what your role, as a trader, is in this system.
The basics of a payment network
In simple words, what happens in an online banking system is that the money is sent by the buyer from his or her account to the seller’s account through the online payment system. The online system can be divided into three parts:
What does a payment gateway do?
The role of a middleman can be explained very well by the following roles that the middleman has. Let’s list the roles down for you now:
There are three main activities that a payment gateway provider indulges in:
Clearing: The second important action that the payment gateway provider performs is that it clears the money transfer. It makes sure that the money has been transferred from the bank account of the customer to that of the trader.
Reporting: Another essential action that the middleman performs is that it records all the transactions that take place and inform the parties that are involved in the process.
The procedure in detail
For the process to take place, there are some participants that are to be involved. Here are the people that are involved in a conventional:
Trader: This is the person or company that wants to sell the product at the price that is in the tag.
Online website: This is the platform that the trader is using to sell his or her products and this is where the customer interacts with the company also.
Trader’s bank account: The whole process is taking place to get money into the bank account of the trader in the end!
Acquirer: This is the bank that has opened the trader’s bank account and it processes card payments for the trader as well.
Issuer: It is the bank that takes the payment from the customer and provides the payment to the acquirer. All of this is done on behalf of the customer.
Customer’s bank account: This bank comes into the process when the payment is not through the card. It makes the payment for the customer in that case.
Payment gateway: The middleman between the trader, the customer, and the banks that are involved in the online transaction process.
As we have now recognized the characters that play their parts in the process of an online transaction, let’s move on to the sequence of events:
And guess what? The whole process will take almost 2-3 seconds to be successful. But wait, there is one final step left! In the case of payments that are made through the card, the issuer bank has to clear the transaction with the acquirer bank. This step will take some days in case there are physical goods involved in the transaction. Normally, the Auths that don’t have any issue and have been approved are submitted to the acquirer bank by the trader. The acquirer bank will then the issuer bank to settle the funds that are outstanding. After the acquirer receives the funds, it will transfer them to the trader’s account. This period may be called the settlement period and it will take up to 4 business days to complete the process.
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