So, you have finally decided to do! You are going to open your own E-commerce business! Congrats but there are a few things that you may want to know about when doing that. The first and possibly the most important is to have a good understanding of how off-site credit card process works and what your options are. So, in this article, we are going to be looking at just that. So, let’s get started, shall we?
What Is It?
Nowadays you must have a way to accept card payments and when you are dealing with an online e-commerce business this is deathly important. An off-site credit card processor is a third party that allows you to take in those payments securely. This is done by means of several systems put in place through your online store. The first is a payment gateway and then it moves on to the payment processor, then the bank and finally to you.
How It Works?
But how does that all work well here is a little breakdown of the system and what each step entails. Once the customer has found what they want and are ready to check out this is where the whole process begins:
Payment Gateway
This a service that offers secure verification and authorization to a selected account like Square.
Payment Processor
Payment processors are ether a merchant account set up by you with a bank or you can use a 3rd party payment processor like Visa, Mastercard or PayPal. These institutions set-up one merchant account for multiple businesses instead of just one like the merchant account option.
Bank
The money is aggregated in an account where it waits for the final clearing of the transaction and then it is sent to your specific account ready for you to spend or reinvest.
Best Options
So, as you can see there are really two options for you when it comes to credit card processing. The traditional route of a merchant account or the more modern way of the 3rd party payment processor.
Merchant Account
This is the elder school option and is often great if you are a big corporation that has a need for a dedicated account for your stores. You go through a banking institution and set up an account just like you would a personal account.
3rd Party-Payment Processors
Third-party processors are perhaps the best choice for the start-up or smaller e-commerce business. This is a company that instead of individual accounts sets up one big account for different sellers and then moves the funds through these accounts into the seller’s hands via online transfers.
Final Thoughts
The good news is that most payment gateways support a whole slew of payment processing options. In the end, though the absolute best option for an e-commerce business that is just starting or is a small store is to go with a 3rd party payment processor. This will give the entrepreneur the option to accept many different payments and be more secure too.