How Online Credit Card Processing Works

Owning and running a business isn’t easy, and if you’ve ever had to do just that for a significant amount of time, you’ll know that every bit of good advice counts, and that a little precaution goes a long way. As you probably know, dear entrepreneur, because money is the most fundamental component of any for-profit organization, it is also the most stressful. Luckily, those who’ve gone before you have a little experience in the area, and can help you manage your equipment, personnel, and – most essentially – your financial skills.

From hardware to software, checkout to refund, Vision Payment Solutions (VPS) offers full-service, comprehensive card-processing technology and support, and we love to keep our readers informed about what’s going on in the industry. This article will explain to you, if you’re just considering accepting credit or debit cards from your customers, how the process works from an online perspective. If you’ve been accepting cards for some time now and understand the process fairly well, however, we hope this piece will still help clarify some of the more technical issues in the matter.

If you own an e-commerce site, you have to have online credit card processing. With an electronic merchant account and card payment gateway – all of which can be arranged through VPS – you allow your patrons to buy your products and services with just the click of a mouse, 24 hours a day, 7 days a week; making money while you sleep has never been easier.

Vision Payment Solutions provides our clientele with merchant accounts and the ability to process credit card payments of all kinds, no matter the size, shape or nature of your website. Below, you will find some basic information on processing credit cards online. Keep in mind that some of these principles vary among different systems, but that, overall, these steps fairly accurately represent the fundamental components of online card processing today.

  1. A web surfer accesses your website, browses available merchandise, adds them to their shopping cart, and when they are ready for check out, they type in their billing information.
  2. If you don’t have a secure site, the customer should be transferred to a secure payment gateway. If, however, you do have a secure site, then the billing information will be forwarded to a gateway without the customer even leaving your page.
  3. When the billing information traverses the payment gateway, it is run through the credit card company’s processor.
  4. The processor then passes that information from the gateway to the bank that issued the credit card, which ensures that the card used is legitimate and that the amount required is available on the customer’s card.
  5. The bank isolates the purchase amount for you and returns either an approval number (if all criteria are met) or a decline message (if there’s a problem) to the processor.
  6. In about 10 seconds or so, the information is passed back through the gateway.
  7. The gateway sends the approval code back to your site or, if you do not have a secure site, gives your customer his or her approval information. At this time, you can also opt to have the payment gateway email your customer a receipt – a digital confirmation of your customer’s purchase, which can even be printed for his or her hardcopy records.
  8. Ultimately, the final payment is secured; it is deposited in your merchant account. Usually, it takes about 48 hours from the time of transaction for the money to show up in your checking account.

We hope this brief explanation of online credit card processing was, at the least, informative, and at the most, will help you better understand how you can work with the system to get the most bang for your buck. If you have any further questions on the issue, or would like to set up a merchant account with us, do not hesitate to call us at (877) 674-2286. A friendly VPS representative is standing by.