Different Methods of Taking Credit Cards Explained

Below are the different methods for taking credit card payments over the Internet.

INTERMEDIARY
Letting someone else take payment for you. Example: PayPal

E-mail intermediary transactions require the customer to visit another Web site for the purpose of supplying credit card information. They are usually asked to join a list. After the customer's credit card is successfully processed, the funds are credited to the merchant's account. The merchant receives an e-mail notice of the payment and must visit the service provider site to claim the money.

With this process, the customer's credit card statement will show the name of the service company as the billing party. This can cause customer confusion and result in charge back requests unless the order forms and order confirmations provided by the direct service company keep the customer well informed.

The viability of either of this service for taking credit cards at your store will depend on the policies of the service provider and your particular selling situation.

GATEWAY PROCESSING
Gateway processing is done over the Internet using a gateway connection. You will need an Internet merchant account from an acquiring bank and a payment gateway solution).

You almost never connect directly to financial networks, but process through the payment gateway. A payment gateway provider supplies instructions for connecting to their server which in turn is connected directly with the financial networks.

Capital Merchant Solutions and iTransact are examples of gateway processing. You must have a merchant account, and when someone places an order at your web site, the credit card is processed through the gateway. The customer is temporarily transferred from your web site while the credit card is processed by the gateway, and then he or she is returned after the process is over. It will appear to your customers that they are at your site the entire time.

There will be gateway and merchant account charges. The gateway charges may be billed directly to you or through your Merchant bank and will range from $20 to $80 per month.

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