Payment processors are often third-party companies that handle transactions like debit or credit cards for merchants in their bank of choice. These companies will check the details that they have received by forwarding them to the issuing bank of a specific card, verifying them, and using anti-fraud measures to all the transactions at any given time.
Most of the popular systems used worldwide are Bluepay, PayPal, Authorize.net, Citrus, and Braintree. If this is your first time setting up your payment gateway, you might want to take advantage of test automation being implemented so everything will work fine once your website is live. Most of the terminologies are included below so you can be familiar with them.
Get these Payments Right the First Time
It’s essential to choose a company that’s familiar with the diverse payment instruments across the globe, and they should have the ability to process and test real transactions. Nowadays, the world is not full of complex gateways and higher customer expectations that many test transactions could not keep up. Sandboxes and dummy credit cards are also unreliable since they can give you a false sense of security. It’s essential that you’re confident in your system’s ability to test transactions when your store goes live.
Live and real testing instruments are what you need to be confident that every customer can transact successfully when it’s their time to check out their goods. You can reduce risks and improve your overall usability with these companies. If you’re rolling out a digital wallet, you can expand into new territories and customer bases and accept the in-market alternative payment method. See more about digital wallets on this page here.
Gateway Terminologies
1. Merchants – The merchant is a company or person that sells services or products. They can include Amazon, eBay, and more. You can also consider your business a merchant if you’ve set up an eCommerce store on a website.
2. Debit and Credit Cards – These are plastic cards that can be used to buy products and services online. They are generally connected through a credit or savings account. They have a 16-digit number, hologram, expiration date, signature panel, magnetic strips, and card verification value or CVV number at the back.
3. Acquiring Banks – These are generally financial institutions that will maintain the merchant bank account. This will help the business process and accept debit or credit card transactions to their stores.
4. Issuing Bank – This bank has issued the debit or credit card of the customer. Whenever the consumer uses their cards to make a purchase, the issuing financial institution will approve or decline a specific purchase based on the standing of their customer and the amount available in their funds. A rejected transaction can mean that the expiry date can be incorrect or the total purchase amount has exceeded the limit available on the account.
5. Transaction – This is an end-to-end process where the merchant receives the funds after the customer completes the transaction.
6. Authorization – The authorization is generally a request provided by the issuing bank to the customer to confirm the validity of the purchase, the presence of sufficient funds, and confirm the consumer’s ability to pay. Once this is completed, the funds that were on hold will be deducted from the credit limit or balance of the customer’s debit card. Get more info about authorization on this website: https://www.techtarget.com/searchsoftwarequality/definition/authorization.
7. Capture – With this step, the merchant will collect the relevant information and send a capture or settlement request to the processor. This will then initiate the fund transfer, and the merchant will finally receive the amount.
Testing is an Important Part of the Process
If you’re shopping in a mall or a brick-and-mortar store, you would generally swipe your card or pay in cash to complete the payment. The Point of Sale or POS testing will tell the merchant whether the transaction was approved or disapproved. For the customers who are processing online transactions all the time, the entire experience should be seamless. They will just have to click the play button and expect to see a declined or successful message.
This is where the e-commerce shops should make sure that they can complete the payment cycles. They need to get the transactions from the online store, authorize, capture, refund, or void certain payments and make sure that all the components are working. This is where the testing phase will help them get used to the entire workflow and help them evaluate if their chosen method is actually an excellent fit for their company.