Nowadays, most companies and organizations use online payment in their transaction. of course, this process saves more time and effort whether for the company itself or the customers. so, what is online payment?
What is online payment processing?
Basically, It refers to money that is exchanged electronically. it is the transfection process of monetary funds online, this involves computer networks, the internet, and digital stored value systems. When you collect payment over the internet, you use it. by a credit card or other checking account.
The online payment process steps
1- the customer completes the payment form on the merchant website and submits the information.
2- The merchant submits the payment information to the online payment gateway.
3- The payment gateway submits the payment to the payment processor.
4- The payment processor authorizes the payment and responds to the payment gateway.
5- The payment gateway responds back to the merchant.
6- The merchant responds back to the customer showing if the online payment was successful or not and taking the appropriate action.
The Advantages of Online Payment
- suitable for the customer
People are increasingly comfortable paying online. When members or supporters are ready to sign up, register for an event, or make a donation, they want to do it quickly and easily. In fact, websites that don’t support online payment can be seen as being out of step.
- Save time
Online payments are faster than manual payments since you don’t have to wait for the check to arrive or for it to clear. The whole process – from submitting an online payment to updating your bank account– can take a matter of seconds.
The end result is improved cash flow for your organization and almost immediate confirmation of transactions. Prospective members won’t have to wait to join your organization, and participants will know right away whether they have successfully registered for an event.
- Save the effort
Automated payments also save you the trouble of depositing the check and recording the payment manually. Once you set up online payments for your website, they are automatically processed. You don’t handle or store any credit card information. Any updates to member records are handled automatically.
1- A payment gateway
it is a service that receives the online payment request from your website and directs it to the payment processor.
2- Payment processor
the service that validates the purchaser’s credit card details and checks if they have sufficient funds in their account to cover the payment. If the customer has sufficient funds, the transaction is authorized, and the funds are transferred from the customer’s account.
3- payment provider
is a company that operates the payment gateway or payment processor services.
4- Merchant account
it is the most important term in the system. When an online transaction is successfully completed, the funds are transferred from the purchaser’s account to your merchant account, a special kind of bank account used exclusively to hold funds received from credit and debit card transactions.
To accept online payments, you usually need to set up a merchant account with your payment provider. Funds accumulating in your merchant account are transferred to your organization’s bank account on a regular basis.