Know the Differences among Three Types of Online Payment Processing Services

 

Payment processing is one of the most oft overlooked aspects of having a company. You, as a professional in the online products and services that your company offers. But don't you need to be a tech-savvy technology person? Not, if you're using a reputable online payment processing service. You may find it helpful to read through some of the major differences between these three types of services and then compare them to what your business is really looking for.

There are many different forms of online payment processing services out there. Some are third-party and are built right into merchant accounts with banks like MasterCard and Visa. Other third-party services are completely separate from these established companies and can accept credit cards online. The major difference between these services and the ones that come with banks is that a bank would have its own application setup and guidelines that need to be followed. These applications would also be subject to change at any time.

With debit cards or e-checks, the merchant needs not go through the hassles of setting up his own bank account. He would just have to register with the online payment processing services provider, make his product available, and complete the sale. The only thing needed from the merchant is the selection of accepting debit cards or e-checks from the online merchant account providers. These companies work closely with the major credit card brands like Visa and MasterCard.

Third-party payment processing services, or so-called gateways, are totally independent and are not tied to any one particular brand or vendor. They work by connecting a merchant's website to payment gateways. Once a customer buys something online, he could login to his online merchant account and choose which credit card transactions he wants to perform. The payment gateway then submits the details of the transaction to the network, along with the amount, to the appropriate network. The details are verified and approved, and the transaction is immediately processed and completed.

Most online merchants choose to work with payment processing companies that allow for multi-currency or multi Traceable payment processing. This is because many of these companies offer their clients' international e-commerce facilities. In fact, most of the big international brands have now entered into this business segment. Credit card transactions are fast turning into a multi-billion dollar business for these companies. And they are willing to tap the resources of third-party processors to complete their e-business.

However, there are some disadvantages for merchants who decide to deal with these third-party processors. As already stated, they do not have their own bank accounts. The only money they have in this process is the money they charge the customers for their credit cards. So they are limited to receiving payments in the currencies they have chosen for their credit cards.

When selecting a third-party payment processing company, it is important that the individual merchant knows what kind of transaction options he can expect from his credit card processor. A good example would be whether he can accept debit cards, or if he has to accept only credit cards. The merchant must also consider the charges that he will have to incur for the service.

Payment processing companies that work with these third-party networks are often preferred over other processing companies by retailers because of their cost-effectiveness and fast turnaround time. But the merchants must remember that they are not the ones who will bear the costs for this. The processing companies will shoulder these costs. They are the ones who will make use of the money earned through these card brand networks to make amends for the losses incurred during the course of their business operations.