An Introduction to Payment Processing Services
It can be quite daunting to hear a term like “payment processing service providers.” The term, though it sounds technical, is a process that anyone who has ever shopped online goes through. It is simply the type of technology you’re using when you make a purchase and then “checkout” online.
PSPs: How They Work
Payment processing service providers work by accepting electronic payments for many different payment methods that may include credit cards, direct deposits, and bank transfers. Usually, payment processing services (PSPs) use software as a service model and a single payment gateway for consumers with multiple payment methods. PSPs can connect to various acquiring banks, cards, and payment networks.
Payment gateways are like the credit card machines you swipe your card through when you make a purchase at a store. The only difference is that payment gateways do not need a physical card to make a charge, hence the name—it is a gateway between a business, a client, a client’s credit card provider, and an institution’s bank.
Some gateways require merchant accounts, which is a bank account that handles funds received through credit cards. Brick-and-mortar stores or any retail businesses that swipe cards already have merchant accounts.
There is, of course, a cost to setting up an online payment system. If your gateway offers many different functions and services, the rate tends to be higher. A good example would be how some gateways will charge extra if you want to enable their services to include auto-billing (when a client makes regular, recurring payments on his or her credit card).
Another feature you should consider adding is a fraud detection toolbox. Most payment gateways give you many tools to help protect your business against fraud, like filters to see the scope of people or places from whom you receive payments. It’s a useful protection to have for your business and clients.
Credit Card Fraud
Unfortunately, credit card fraud has become a global phenomenon. During 2012, credit card fraud resulted in $11.27 billion globally. You, a friend, or family member has probably been a victim of credit card fraud. But it’s not only a financial loss for the individual, it’s also a loss for the corporation. Many cardholders can have their banks or credit card companies pay them back, as they have fraud protection services, but how do the institutions cover their losses? Merchants and financial institutions actually bear the loss. A merchant will lose the value of any goods or services sold, as well as the associated fees.
Choosing a PSP
Choosing a PSP can be confusing, but this brief introduction should provide some insight. Many different factors should be considered before pulling the trigger. Evaluate your options and pick a gateway that works best for you.
Allied Wallet is a safe-to-use payment processing service provider. Our company is well-suited to nearly any business across the globe. Companies can contact Allied Wallet directly for their e-commerce solutions.