HomeAboutCredit Card ProcessingOnline Payment ProcessingMobile Payment ProcessingSmall Business LoansMerchant Cash AdvanceSmall Business LoansMerchant Cash AdvanceMobile Processing AppsCredit Card Processing AppsOnline Payment Processing AppsContact

Online Payment Processing Reviews

If you want to partner with the best online payment processing services you can find, then our online payment processing reviews will serve you just right. You can find relevant information on the key players and merchant account providers in the industry. But it doesn’t stop there. You can increase your business revenue with our online payment processing reviews that disclose industry level experts and recommendations on the online payment processing services that are ideal for your business size, budget, and growth trajectory. The number of online payment processing companies keep multiplying as the years go by.

Hence, what better way to safeguard the financial future of your company than by using online payment processing reviews to scrutinize and evaluate your potential lender before partnering with them. We believe our approach to company reviews, fact-checking processes, content researching, and transparent writing ensures that you get nothing but the real-life conditions behind the long contracts and T&Cs that online payment processing companies are known for. Plus, if you value the input of business owners and other users, you will find enough to help you choose the best online payment processing company that gets you paid.

The Complete Guide to Online Payment Processing

Today’s shoppers always choose the simplest eCommerce transaction over complex checkout processes. However, online payment processing is a complex procedure that involves a lot of backend work. The impact of choosing the wrong payment processor can have huge implications on your bottom line. 

It’s important that small business owners and entrepreneurs need to thoroughly research existing payment processing companies before narrowing down on the right one. Usually, eCommerce giants like Amazon set the pace in the eCommerce industry. A visit to the Amazon website, and you’ll experience a seamless check-out with no complications. Since they have set the bar of online payment processing so high, other online companies must try and follow suit. 

Upon closer analysis, you’ll notice that the overall service experience of most payment processors’ is more-or-less the same, irrespective of the company size. Hence, the kind of purchase experience you offer your customers isn’t dependent on the size of your company - not anymore. 

To help you appreciate this fact, let’s understand the role of payment processors in online businesses. 

Who is a Payment Processor?

A payment processor is a collective name for any company that merchants choose to successfully handle financial transactions in a quick and secure way for several payment methods. The main aim of choosing a payment processor is to use a dedicated third-party vendor who takes charge of all models of financial payments for other businesses at a cost. 

Usually, business owners confuse payment processors with payment gateways. In this guide, you’ll discover how to distinguish between the two, especially when choosing online payment processing providers. Payment gateways ensure that transactions have all the correct information securely presented. Then they either decline or authorize transactions based on the information presented. 

On the other hand, payment processors transmit and analyze payment data. Often, people get these two mixed up due to the fact that payment processing software integrates with payment gateways to provide a complete package for businesses. 

So you want to choose the ideal payment processor for your small business. Let’s take it from the top, by covering the following main points: 

  • What is payment processing?
  • Factors involved in payment processing 
  • How online payment processing works - 4 steps
  • The cost of payment processing
  • Online payment processing industry
  • Top online payment processing companies
  • What the future holds for online payment processing

What is Online Payment Processing?

Online payment processing is the software the merchants and their customers use to enable debit and credit card transactions through the internet. If you break down the various processes that comprise online payment processing services, the moment your customers click “confirm purchase” is perhaps the most crucial on the buying journey. 

If the series of events leading from the “confirm purchase” page isn’t smooth and fast, you may lose customers and potential purchases. The days of hard cash or checks are slowly fading away. Instead, eCommerce retailers powered by payment processors and payment gateways strategically position themselves when they adjust to digital and mobile payment methods growing in various markets and industries. 

With the help of payment processors, you can receive payments from several payment methods using a number of payment gateways that approve each transaction after security verifications. Per the verification of payment processors, your gateway will either deny or approve based on personal information and the available funds in the accounts tied to the various payment accounts. 

Remember, all these processes occur within a matter of seconds. Next, the funds from your customers’ accounts are transferred into your merchant accounts. You get paid, and your customer makes a purchase within seconds, either from the comfort of their home or anywhere else. This is done free of cost or for a small charge. 

Factors Involved in Payment Processing

Online payment processing has three main factors that interface with each other for successful transactions. You get a better understanding of how things work by knowing the role each member plays in the grand scheme of things. 

The Merchant

Merchant is the collective name used to describe the eCommerce businesses that offer services and products for sale through the internet. Once your company accepts payments through the internet, you fall within this category. However, you need to open a merchant bank account that can receive payments. 

The Customer

Customers are the buyers who make payments in exchange for products or services through the internet. Through your eCommerce shop, customers with the right amount of funds will make payments using the payment methods available through your website. Usually, they only have to receive approval for a debit or credit card to begin making purchases through the internet. 

Technology

All this talk of eCommerce and online transactions is only made possible by sophisticated encryption technology. Hence, technology makes the necessary transaction easy between customers and their merchants. First, debit or credit card information gets verified by your payment gateway; then, your payment processor concludes the purchase.  

How Online Payment Processing Works 

Online payment processing works through a series of electronic gateways. Provided your transaction meets the requirements of each individual payment gateway, it proceeds to the next level where another payment gateway awaits. Your merchant bank is the last gateway in the series, and this is where the money from the purchase is deposited into your account. 

  1. Customers make online purchases

Customers can attempt purchases. However, only those with the right cards, credentials, and funds in their account will pass the verification process. This is the responsibility of your online payment processor and payment gateway

  1. Payment gateway encrypts transaction information

Online payment processing has to deal with many security threats by encrypting customer information. This prevents unauthorized parties like hackers from accessing personal details and customers’ credit card information. This responsibility falls to the payment gateway. 

  1. Verification of transaction detail by the payment processor

After encryption, all the information gets transferred to the payment processor to validate the transaction. At this point, if your customer doesn’t have enough funds, the transaction will be declined. However, if all information and funds check out, the request is declared valid. Next, the right credit card company and the bank receives the information. 

  1. Funds Approval by customer’s credit card company

Though all the stages above determine the end result of each transaction, the final decision lies with the banks and credit card companies. These two hold the key to the funds necessary to conclude the purchase. Usually, no red flags arise from your payment processor or payment gateway; these two players will authorize your transaction. 

Reasons Why Some Transactions Fail

  • The status of frozen accounts
  • Transaction limits
  • Stolen or lost cards
  • Expired cards or invalid credit card number
  • Insufficient funds
  • Card Code Verification (CCV) invalidity
  • Card and cardholder address mismatched

The remaining procedures include the following steps:

  • Payment processor makes the request for funds transfer from issuing bank
  • Your merchant receives funds (Time Frame usually depends on payment method and timing of purchase).

The Cost of Payment Processing

Online payment processing comes at a cost to the merchants. Generally, this is how credit card associations, payment processors, issuing banks, and merchant banks get paid. The sophisticated technology that ties all the players in the payment processing industry needs to be paid for. 

However, payment methods are based on your type of business. But you have four main fees charged across the industry. Below are the four main fees. 

  • Assessment fee - The credit card issuing organizations like Mastercard and Visa receive a predetermined percentage as transaction fee.
  • Interchange fee - These are based on each transaction to cover the risk associated with online transactions. 
  • Merchant bank fee - The amount charged your merchant bank varies based on your industry, company, and the total amount of the transaction. 
  • Authorization fee - This is the percentage charged by your payment processor for authorizing and processing the transaction. 

Top Online Payment Processing Companies

If you fall into the merchant category, you’re probably looking for the best online payment processing companies to trust your business with. Below, you’ll find some of the top players in the payment processing industry. 

  • Venmo for business
  • Amazon Pay
  • Stripe Payments
  • Square Payments
  • CyberSource Payment Management Platform
  • EPX
  • Chargent
  • Pin Payments
  • Braintree Direct
  • Sage Payment Solutions

These options provide some of the best payment processing for eCommerce businesses. However, if you would like in-depth online payment processing reviews, you can visit our blog for more resources on the payment processing industry.