You need to select the right payment processor when you run a business accepting credit and debit cards online. An online payment processor is what handles the transactional burden from capturing a sale to sending you a billing statement and working with your bank to make sure that you’re paid.
If a customer purchases something on your site or in person at a brick-and-mortar store the credit or debit card information is processed by a payment gateway or PoS terminal. The gateway encrypts the data to protect it and sends it to the payment processor, who transmits it to the card network of the customer. The card network checks with the customer’s bank to determine if there’s enough funds in the account to pay for the item. If the bank approves the purchase then the card issuer will transfer the funds from their account to the bank of the merchant. The payment processor will relay this response to the merchant’s site or PoS terminal. This will inform the customer of their successful payment.
When selecting a processor, take into account aspects like security, user-friendliness, and compatibility with current systems. Select a processor that offers APIs and plugins to seamlessly integrate with your ecommerce platform or the POS system. Also, you should evaluate the customer experience at checkout and your team’s reporting and transaction management experience. In the end, make sure you understand the contract terms and how easy it will be to switch providers in the future.