Online payment refers to money that is exchanged electronically. Typically, this involves use of computer networks, the internet and digital stored value systems. When you collect a payment over the internet, you are accepting an online payment. Online payment usually is the transaction that results in transfer of monetary funds from the customer bank or credit card account to your bank account. The online payment can be done from a credit card, checking account or other clearing house like paypal for example.
Merchants accepting online payments need to comply with a list of security requirements. The online payment specific security is designed to decrease the chance of the billing and personal information being stolen. The transfer needs to occur over secure encrypted connection. In the cases of recurring billing where customer data is stored, the merchant needs to enforce a longer list of security features and protocols that are usually referred to as PCI compliance requirements. Recurring billing systems that employ online payment procedures need to be periodically scanned for security vulnerabilities.
To accept an online payment the merchant needs to have access to an Online Payment Gateway. The online payment gateway is a service provider that is integrated with the credit card and transfers the online payment information between the merchant and the payment processor.
The typical online payment process has the following stages:
-Customer submits the payment information to the merchant. For example customer completes the payment form on the merchant website and submits the information.
-The merchant submits the payment information to the online payment gateway.
-The online payment gateway submits the payment to the payment processor.
-The payment processor authorizes the payment and responds to the payment gateway
-The payment gateway responds back to the Merchant
-The merchant responds back to the customer showing if the online payment was successful or not and taking the appropriate action.
-An e-commerce online payment system facilitates the acceptance of electronic payment for online transactions. Also known as a sample of Electronic Data Interchange (EDI), e-commerce online payment systems have become increasingly popular due to the widespread use of the internet-based shopping and banking.
A payment service provider (PSP) offers merchants online services for accepting electronic online payments by a variety of payment methods including credit card, bank-based payments such as direct debit, bank transfer, and real-time bank transfer based on online banking. Some PSPs provide services to process other methods including cash payments, wallets such as PayPal, prepaid cards or vouchers, and even paper or e-check processing.
An Internet Merchant Account (IMA) allows merchants to accept debit/credit card payments directly to their business bank account, online. Due to the stringent criteria required for an Internet Merchant Account (IMA), many smaller businesses opt for a payment processing company instead.
Using a Payment Gateway, provided by a Payment Service Provider (PSP) offers an alternative for businesses whose card-based-turnover is too low or who fail to meet the criteria for an Internet Merchant Account (IMA).
AT Integrated ecommerce platform includes and automates all technical aspects of accepting online payments. It can accept online payments using a combination of online payment processors at the same timeACH payments are electronic credit and debit transfers, allowing customers to make payments from their bank accounts for utilities, mortgage loans, and other types of bills. ACH stands for Automated Clearing House and most payment processors offer ACH payment options to their customers, especially for monthly- and subscription-based transactions. Most payment solutions use ACH to send money (minus fees) to their customers.
A merchant account is a bank account that allows a customer to receive payments through credit or debit cards. Merchant providers are required to obey regulations established by card associations. Many processors (such as the ones listed below) act as both the merchant account as well as the payment gateway.
A payment gateway allows merchants to securely pass credit card information between the customer and the merchant and also between merchant and the payment processor. The payment gateway is the middleman between the merchant and their sponsoring bank.
A payment processor is the company that a merchant uses to handle credit card transactions. Payment processors implement anti-fraud measures to ensure that both the front-facing customer and the merchant are protected.
PCI compliance is when a merchant or payment gateway sets their payment environment up in a way that meets the Payment Card Industry Data Security Standard (PCI DSS). The PCI DSS standard was created by the Payment Card Industry Security Standards Council to increase security of cardholder data and to reduce fraud.
Online Vs. Offline Debit
The term online vs. offline debit denotes the comparison between two distinct methods of making payment through a debit card. The former is a PIN based transaction and the later is a signature based transaction process.
Features of Online Debit Transaction
The online debit transaction is one of the popular transaction methods. This is preferred by most of the clients because the process is very fast as well as very safe in comparison to other methods of transaction. The debit cardholders use their card to pay for different kind of purchases.
For the purpose to such transactions, the magnetic card readers are used. The customer swipes their cards through the reader and the Personal Identification Number or PIN is entered in the machine.
By doing this, the exact price of the purchased commodity is transferred into the shop-owners account from the cardholder’s account. This process is safe and convenient for the shop-owners too because the shop-owners are not exposed to any kind of risk.
There are a number of requirements for the online debit transaction.
The customer should have access to the following facilities:
-Debit Processing Service
Features of Offline Debit Transaction
These transactions take nearly three days for clearance. In this type of transaction, the cardholders are not required to provide their Personal Identification Number. There are a number of credit card companies that issue offline debit cards. These cards are accepted in all the shops where transaction through credit cards is allowed. Transaction on Internet is also allowed for these offline credit cards.
For the purpose of transaction, the cardholders give their offline debit card to the shop-owners. The card is then swiped trough the payment terminal and the transaction are almost done. After this the sales draft is signed by the cardholder and the respective shop-owner receives the transaction amount in a maximum period of three days. These transactions are subjected to transaction fees and a number of discounts that are also enjoyed by the debit cardholders.
Both these forms of debit transaction are preferred by the customers but if online vs. offline debit transactions are analyzed, the online transaction is preferred as it is more fast and convenient.
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