Online Payment Processor
Most businesses rely on credit card processors to handle the details of credit and debit card acceptance. Credit card processing is a critical service: it ensures that customers can make payment easily and quickly.
First, a customer submits his or her credit card information for payment. In the store, consumers swipe magnetic stripe cards, support EMV chip cards, tap contactless cards, and use digital wallets such as the Apple Pay mobile payment solution with their smartphones. Consumers present credit and debit cards online on websites and apps through payment gateways. For phone orders, a virtual terminal offers secure credit card processing with a personal computer.
That approval is sent back to your payment processor and ultimately returns to your terminal or credit card reader. Approved transactions are batched by settlement usually at the end of each business day. Your customers’ accounts are charged for the transactions, with deposits made to your merchant bank account.
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Our goal is to simplify things so that your company can continue to grow and join the online world. That is why we have prepared this article with the basic concepts and key players in the industry.
The cost of customer acquisition or CAC and the customer life cycle or LTV, are two indicators that will allow us to know if we are really getting profits from a customer, which in turn shows us if our efforts are generating the results and profitability we expect.
Basically, the CAC represents the expenditure or economic investment necessary to attract a new customer. On the other hand, LTV shows us the potential income from a customer for the period of time that he/she remains with us.
The issuer is in charge of issuing credit or debit cards to individuals on behalf of large franchises or networks (Visa, MasterCard, etc.), i.e., it is an intermediary between consumers and these networks.
It is a service that helps merchants to implement a payment system in online stores to facilitate online payment. The gateway makes the transfer of information between an online store or service and the acquiring processor or bank simpler, faster and safer. For the end customer, this can mean a better shopping experience.
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A payment processor is a transaction operator for financial calculations (often from a third party) appointed by a merchant to handle multi-channel transactions, such as credit cards and debit cards, for acquiring banks. They are generally divided into two types: front-end and back-end.
Front-end processors have connections to various card associations and provide authorization and settlement services to merchants. Back-end processors accept settlements from front-end processors and, through the Federal Reserve Bank, for example, move money from the issuing bank to the merchant’s bank.
In an operation that usually takes a few seconds, the payment processor will verify the data received by forwarding it to the appropriate card-issuing bank or card association for verification, and will also perform a series of anti-fraud measures to verify the transaction.
Once the payment processor has received confirmation that the credit card details have been verified, the information is transmitted through the payment gateway to the merchant, who will then complete the payment transaction. If the card association denies verification, the payment processor will transmit the information to the merchant, who will reject the transaction.
Sample Payment Processors
If you are here, it is because you are interested in knowing which are the best online payment processors that will help you make money online, if you have an online store or if your company needs to make online transactions.
PayPal is undoubtedly the best known option when talking about the best online payment processors. It is a company from the United States that is in charge of managing transactions between users and serves as an electronic alternative to traditional methods.
Within its interface you can invest, transfer, send or receive money in about 9 cryptocurrencies, 23 traditional currencies and 4 precious metals. In addition, it is possible to convert from one currency to another with practically imperceptible commissions.
It allows the transfer of currencies between users quickly and securely, and also gives you the option of having a physical debit card to use when buying or withdrawing money from an ATM.
Solid Trust Pay is a very good alternative if you are looking for maximum security. It allows you to add money via bank transfers, credit cards or checks and is very useful if you want to invest online on web pages.