As online shopping continues to grow, many businesses are setting up electronic stores to accept more types of payments and capture more sales. To be successful, companies need to integrate streamlined online payment processing. As a high-risk merchant account, however, that process can become complicated.
In this article, we’ll take a look at the infrastructure of online transaction processing. We’ll discuss the key players, how they work together, and why it’s an important feature to have for your business. Keep reading to learn more about the world of online payment services.
What is Online Transaction Processing?
Online Transaction Processing (OLTP) is the data system that is used to facilitate and control transaction-oriented packages done on the internet. It is responsible for the input of data, the processing of data, and the updating of data. Because of its complexity, most businesses use a database management system to help support their OLTP procedures.
Online Payment Terminology
A payment gateway is a tool that securely receives and transmits online payment data from the merchant’s website and directs it to the payment processor to continue the process of the transaction. In essence, the payment gateway is the equivalent of the point-of-sale system you’d use to pay for goods at a grocery store.
A payment processor is a service that validates a customer’s credit card details and ensures that they have enough funds to cover the cost of an item. If the consumer has sufficient funds, the transaction will be authorized, and the funds are then transferred from the purchaser’s account to the payment gateway and finally to the merchant account.
A payment provider is an agency that operates the payment gateway or payment processor services. It is the company that offers several different types of payment gateways, services, and features. For example, PayPal is a payment service that provides a variety of payment services and payment gateways.
A payment processor is in charge of executing the transaction between the customer, the merchant, and the issuing/acquiring banks. The payment processor is also responsible for providing the necessary equipment to accept credit card payments.
High-Risk Merchant Account
A high-risk merchant account is a type of payment processing account that is given to businesses thought of to be considered a high threat to banks. As high-risk companies are more inclined to chargebacks, they often pay higher fees with merchant providers.
If a commercial enterprise comes with an excessive potential of chargebacks, or their records suggest many chargebacks and refunds, the financial institution might also place a rolling reserve on the account to cover potential chargebacks or instances of fraud.
How Online Transactions are Processed
When a customer finds something they would like to purchase on your website, they proceed to the checkout to pay for their items. After entering their credit card number and other sensitive information, the data is encrypted and authenticated by the payment gateway and payment processor to prevent fraud. When the sale is authorized, the transaction is sent to the customer’s credit card issuer.
From there, the sale is either approved or denied by the credit card company. If the purchase is approved, the credit card issuer sends the funds to the merchant bank, who, in turn, deposits the money into the merchant account.
Why Online Payment Services are Important
Adding online payment services provides a business, and its customers, with several benefits and advantages.
As more people become comfortable purchasing goods online, online transactions will continue to rise in the coming years. As more customers sign up and purchase more items, making sure they can do so smoothly and quickly is critical. With the help of online payment services, you can stay one step ahead and ensure that each customer has a smooth transaction with your company.
Speed up Purchasing
The whole online transaction process only takes a few seconds to complete, but without a reliable payment service, it can feel like an eternity. With online payment services, businesses can help speed up the payment processing for each customer looking to purchase something. Additionally, it also provides merchants with protection by alerting them immediately if a person making a payment has sufficient funds to cover the purchase.
As a business owner, you don’t have a lot of free time on your hands, and you don’t want to spend what little time you do have manually entering payment data. With a reliable online payment service, you don’t have to handle any of the administrative work. Once you set up your online payment service, all transactions and changes to member records are processed automatically.
As mentioned earlier, the online transaction process happens in a matter of seconds. This isn’t only a great perk for your customers, but it is also an excellent benefit for you. With faster processing of transactions, the money used to purchase your goods and services will land in your bank account even quicker.
Although more consumers are purchasing goods online, they are mostly only doing so with merchants that they know they can trust. With an online payment service, you are signaling to your customers that you value their business and want to protect their sensitive information from fraud when they do business with you. This not only encourages them to work with you more, but also lets them know that their data is secure anytime they visit your website.
Selecting the Right Payment Processor for Your High-Risk Merchant Account
Regardless of the business or the industry, the benefits of Online Transaction Processing are plenty. If you’re a business owner who values the growth of your company, as well as your customers, implementing online payment services is something you can’t afford to miss out on. Choosing the right online payment service for your business is crucial in creating a seamless payment experience for your customers and assisting in the continued development of your organization.
If you’re a high-risk merchant account in need of a merchant account solution, contact High Risk Pay today. We specialize in providing high-risk merchant accounts with guaranteed merchant account solutions to process credit card payments. Give us a call today to find out why working with High Risk Pay will set your business apart from the competition.