How Internet Merchant Accounts Enable Online Transactions

Have you ever wondered just how your customers’ funds end up in your Internet merchant account? Today, we’ll outline the Internet merchant account process, and how your transactions are approved, processed, and deposited into your Internet merchant account

An important distinction to make is the difference between a payment gateway account and an Internet merchant account; they differ in purpose, but work together to facilitate the process.

A payment gateway is an e-commerce service application that authorizes payments for both online and brick-and-mortar businesses, much like a traditional POS terminal found in most stores. Payment gateways protect credit card details by encrypting sensitive information, such as credit card numbers, to pass the data securely among customer, merchant, and payment processor.

An Internet merchant account is a type of merchant account especially formulated to manage online credit card processing. A notable difference between an Internet merchant account and a typical merchant account is the fees involved; understandably, the fees for an Internet merchant account are noticeably higher, due to the obviously higher risk of online payment. So what are some of the methods by which both Internet merchant accounts and payments gateways interact to provide comprehensive online payment-processing solutions to merchants and their customers everywhere? Let’s take a look at the inner workings of an Internet merchant account in action:

The first step is when a consumer orders a product from a merchant’s web store, preferably with a verified, secure connection.

Next, a shopping cart on the merchant’s site gathers and compiles the order to be transmitted to a payment-processing company.

Third, the shopping cart transmits this data to the payment gateway, which is part of the processing company. The credit card processor determines which company manages the customer’s credit card, and transmits a request to charge the card.

Fourth, the client’s card company validates his account, then acknowledges to the card processor that the amount requested is available can be transferred.

Fifth, the card processor tells the shopping cart program whether the transaction was successful or not. The processor transfers the funds to the Internet merchant account provider for deposition into the Internet merchant account.

Last, the internet merchant accounts collect the funds and make transfers to the merchant’s checking account; the credit card processing transaction is complete.

This is how an Internet merchant account fits into the entire process of transactions and credit card processing; it may have a lot of steps, but all this takes just seconds to complete, and having an Internet merchant account is the first step in establishing an online business.