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Ecommerce Credit Card Processor: The Basics

Ecommerce Credit Card Processor: The Basics
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Whether you’re just starting your first business or breaking into ecommerce after years of success with a retail store, there are a few foundational things to know about using an ecommerce credit card processor. In this post, we’ll cover the need-to-knows of online credit card processing to ensure a smooth start.

What’s Required For Successful Online Credit Card Processing

Ecommerce credit card processing requires multiple services and providers. These include:

These providers work together through integrations to provide a seamless user experience for both businesses and consumers.

Payment Processing Demo

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Understand requirements and pricing

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How Ecommerce Credit Card Processing Works

Once you’ve taken care of the preliminary work required to start taking online payments, it’s time to configure your ecommerce credit card processors and make some sales!

On the surface, online credit card processing looks simple, and to the untrained eye it may seem as if every step of an online purchase is supported by a single provider. On the backend, it’s quite the opposite. While your website hosting and shopping cart keep your website live and make your products appear available to consumers, the Payment Gateway and online merchant account power your ability to make actual sales.

In terms of technical steps, successful ecommerce credit card processing goes as follows:

  1. The card information is manually entered into the shopping cart software.
  2. The Payment Gateway receives the transaction information and communicates it to the Payment Processor.
  3. The Card Association then receives the transaction data and determines the Interchange cost for the transaction and approval.
  4. The card-issuing bank communicates the approval to the Card Association network and then the merchant.
  5. The Payment Gateway provides confirmation to the e-commerce site or shopping cart.

Ecommerce Credit Card Processor Costs

If you’re unfamiliar with the basics of payment processing costs, it’d be wise to get acquainted so you can gain a deeper understanding of the costs of online credit card processing.

By default, online payments have a higher cost than those done in-person at retail locations. This is because the act of keying in a transaction online is riskier than dipping an EMV card in a terminal. The higher the risk, the higher the cost. Most businesses doing the majority of their transactions online are set up on a MOTO Tiered plan.

There are ways to keep ecommerce credit card processing costs at a minimum. By utilizing tools like AVS and collecting CVV, you will ensure that you’re paying the lowest cost since you’re using security tools to prevent fraudulent transactions. You can also eliminate costs by minimizing the number of providers you work with.

Learn how to streamline your online payment services.


Do you have any questions based on this information? Post a question in the comment section below and we’ll happily get back to you.

Editor's Note: This post was originally published in February 2019 and has been updated for comprehensiveness and accuracy.

About Author
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Ursula Librizzi

Ursula is the sales and marketing operations manager for PayJunction. She oversees daily marketing tasks and liaises between the sales and marketing departments.

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