“Questions and Answers” Posts

What Are Payment Processors?

What Are Payment Processors?

Payment Processors are the technical glue in the transmission of credit card transactions. They maintain the computer network between Merchant Account Providers and the banks, and facilitate communication between these providers. Despite being a blanket term for all parties involved in payments, Payment Processors are actually one of many providers supplying a unique service in the payment process. Payment Processors’ Contribution to the Payment Process It’s important to note that processors do not directly work or interact with businesses during the payment process. They are true “middlemen” and are chosen by Merchant Service Providers’ banks. Let’s breakdown where…

How Does ACH Payment Processing Work?

How Does ACH Payment Processing Work?

ACH payment processing operates via the ACH network. Every ACH transaction goes through a seven-step process involving six ACH payment processor entities. These entities include the originator, the receiver, the originating depository financial institution (ODFI), the receiving depository financial institution (RDFI), an ACH operator and the National Automated Clearing House Association (NACHA). Below, we define each entity involved and the technical steps to ACH payment processing. ACH Payment Processor Entities Originator: An individual, corporation or other entity that initiates a transaction using the ACH network. Receiver: An individual, corporation or other entity that receives an ACH payment. ODFI: A financial…

What Is Online Credit Card Processing?

What Is Online Credit Card Processing?

Online credit card processing refers to card-not-present payments that are completed on an e-commerce website via a Payment Gateway. The gateway is either provided by or integrated with a Merchant Service Provider. To be successful in online credit card processing, there are certain services and tools that are required, while others are nice to have. Learn about the providers involved, requirements and how you can simplify back-end e-commerce operations. Online Credit Card Processing Setup Before you can start online credit card processing, you need to set up the following: Website Hosting: The technology and services needed for your website to…

How Merchant Services Work

How Merchant Services Work

There isn’t a single answer to the question “How do merchant services work?” Merchant services is complex. On the surface, it seems self explanatory, but peel back the layers and the intricacies are revealed. When it comes to explaining how merchant services work, it’s important to explain all aspects of it. Below, we state and describe six facts that relate to how merchant services work. 1. Merchant services is powered by multiple providers. The truth is there is not a single provider that powers merchant services. Yes, businesses seeking merchant services can work with a single provider, but…

4 Tips On How to Set Up ACH Payments

4 Tips On How to Set Up ACH Payments

ACH payments, in which funds are drawn from a customer’s bank account over the ACH (Automated Clearing House) network, offers some distinct advantages over processing paper checks. Specifically, ACH payments can save you both time and money. While ACH seems simple, the underlying processes are actually somewhat complex, involving a seven-step process with six different entities. These entities include the Originator – the person or entity who initiates the transaction; the Orginating and Receiving Depository Financial institutions (two separate entities); ACH operators and receivers. As you might imagine, the communication and coordination of funds across so many parties is a…