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Who's Involved with Internet Credit Card Processing Selling Product and services over the Internet involves four main parties:
How does Pay On-line! work? The Pay On-line! obtains credit card authorization for merchants directly from the credit card processing system used by banks via a dedicated link with this system. The Pay On-line! transaction servers use this multi-threaded, robust communications link to provide authorizations and funds capture in less than 5 seconds (average) per transaction. Once a transaction is successfully authorized the merchant (the merchant's web site) is immediately notified of the successful authorization and can respond accordingly. The basics about your merchant account This section is provided for information purposes only. Pay On-line! is separate from your merchant account. The terms and conditions of your merchant account are between you and your bank or merchant provider, and should be consulted for specific information related to your merchant agreement with your bank or merchant provider. A merchant account is required to accept credit cards using Pay On-line!. A merchant account is a special account with a bank that is a member of the Visa and MasterCard associations. Such a bank has been certified by Visa and MasterCard associations and can provide you, the merchant, with all of the services related to your merchant account. Once your merchant account is setup and "live" on the credit card system, you can accept credit cards from customers generally as follows: 1. A customer presents his credit card for payment 2. Using your credit card number you submit an electronic request to the processing network for "authorization to capture funds" from the holder's credit card account in the amount of the purchase. You submit this request either by swiping your credit card through an electronic transaction terminal provided by the bank, or by keying the number into your computer. In order to use a computer for this purpose, you must have a modem installed in your computer and also a special software, such as Pay On-line!. 3. The processing network immediately receives your electronic request and determines if the cardholder's account is valid and if the funds are available. If they are, the processing network returns an electronic response to your terminal or computer. This response is called an "authorization code", and is your guaranteed authorization to capture the funds. Typically, this code is a six digit number. The transaction and it's associated authorization are stored in a "batch", where other transactions for that day reside. 4. You print a receipt for the customer using the electronic terminal or your computer and the customer signs the receipt. As far as the customer is concerned, the transaction is complete. As far as you the merchant is concerned, there is one more step to complete the transaction. 5. At the end of your business day (usually), you submit a final request to the processing network to go ahead and "capture the funds" that you obtained authorizations for during the course of business that day. This is called "settlement" or "settling your batch". This request is also submitted using the electronic terminal or your computer and software. The processing network immediately receives your response electronically and determines if the capture amounts contained in your request match the authorizations for each item. If so, the request is granted and an "Accepted" response is returned to your electronic terminal or computer. A settlement report can be printed showing the grand totals by card type (Visa,MasterCard, American Express,Discover, etc) for the settled batch. Note: any corrections to your batch must be made prior to settlement, such as voiding a transaction. 6. Within 48 to 72 hours (usually), the funds associated with the batch you settled are deposited electronically into your business bank account. Typically, the discount rate you pay to your merchant account provider are deducted from the deposit before it transferred to your bank account, resulting in a "net deposit" of funds. 7. At the end of the month, your merchant account provider will mail a statement to you, detailing the credit card activity for the month and the associated fees you have been charged for such. |
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