Online Credit Card Processing - Standard Routine

Online credit card processing is the processes that will check your customers credit card number, expiry date etc., withdraw money from his/her account and deposit it into your account.

It can be achieved manually, but this could get extremely tedious and also take too much of your time. The best option is to automate it. This can be done using different types of software, buying or leasing other people's processing services or by writing a program/script yourself. The process works as:

1) The consumers complete their orders via the merchant's web store. This should be done on a secure web page so that the consumer's personal information including banking information (credit card or check) is encrypted so that it can't be intercepted and read by third parties while being transferred over the internet. Secure pages should always be used while handling credit card processing online.

2) The shopping cart program on the web host computer gathers the order information, compiling it into a form that the credit card processing company expects.

3) The shopping cart transmits the formatted order from the web host to the credit card processor (payment gateway). The credit card processor checks that the information it received about the order to be sure it has everything it needs to continue processing the transaction. It then determines what company manages the customer's credit card and transmits a request for the card to be charged.

4) The customer's credit card company validates the card and the account. If everything checks out correctly and the credit card is clear for purchases the credit card company sends an acknowledgement back to the card processor that the amount requested can be transferred. If the credit card company denies the charge it sends a code back to the credit card processor indicating what the problem was.

5) The credit card processor now tells the shopping cart program at the web host whether or not the transaction was successful (the shopping cart then can tell the customer whether or not the order was complete and send the order on to the merchant for delivery of the product or service). The credit card processor initiates a funds transfer (settlement request) to the merchant account company for deposit into the merchant's bank account that it has on record.

6) Internet merchant accounts collect the funds for a specified period of time and make scheduled transfers to the merchant's regular bank account and the credit card processing transaction is complete.

Credit Card Processing on the Internet

So you have finally finished your e-commerce web site, hired the best web publisher, added all the bells and whistles, outstanding graphics, and great merchandise. Now, how does your prospective customer pay you for your products? Clearly, it is necessary for your site to accept, and process credit card payments, in real time. Failure to do so, would result in a failing enterprise.

Before you can begin the application process, there are several standards that all credit card processors have set. Follow this checklist and you will save yourself a significant amount of time, and aggravation.

1) The checkout, and transaction pages must be secure. This protects the customer from credit card, or identity fraud, which has become epidemic. You achieve this “security” by installing a secure socket layer certificate, or SSL. SSL encrypts information being entered on your site as it is sent across the Internet, so hackers are unable to steal the transmitted information. This Certificate has become very common, and any web host would be able to assist you.

2) A robust Shopping Cart software that utilizes the highest degree of security, and is compatible with the credit card processor. This program must be able to receive, and process orders. Collect personal data, and securely transmit the credit card data from software to the credit card processor. Most importantly, the software should provide the building blocks for a complete, successful customer experience.

3) Your server must have a firewall, especially if you plan on storing the credit card information on your server. Basically, a firewall is a combination of software, and hardware, that inspects incoming data, and filters unwanted, or potentially destructive packets of information. This firewall will not allow hackers to enter your server, and steal sensitive information.

When all these conditions have been met, you are ready to contact your bank to open a credit card merchant’s account. Once your account is opened, your bank will suggest a credit card Gateway. A credit card Gateway receives the customer’s credit card information from your web site, approves or declines the charge, and ultimately transmits money to your bank.

Although the process appears to be very complicated, it is quite straightforward when you know what you are doing. Plan ahead, avoid frustration, and provide your customers with an easy, secure experience that will make them come back for more.

Ted Roxan is a contributing editor of Internet Credit Card Processing Resource

For more details on Internet merchant accounts and Credit Card processors go to: http://myinternet-credit-card-processing.com