Electronic Payment Systems and How They Work
From a merchant’s standpoint, there are two general types of electronic payment systems: those that the customer uses to enter payment information on his or her own and those that the merchant uses to enter the customer’s information. Businesses that want to accept credit card payments and other forms of electronic payments will need one of these payment systems and which one depends mostly on whether that business is taking payments over the internet or by phone and/or mail.
Internet and Electronic Payment Systems
Selling products over the internet gives you an entire world of potential customers to tap into, but when those customers are ready to buy your products, you need to be prepared with a payment gateway and a proper merchant account. The payment gateway allows your customers to enter their credit card information online. It’s very important that you have a gateway that provides security for both you and your customer, protecting their credit card information and your company from fraud. Once that information is entered, your merchant account provider will process the transaction and get approval. Once approved, you get paid.
Telephone and Mail Order Electronic Payments
Some customers don’t feel
comfortable giving out their credit card information online, while others are simply set in their ways of ordering by mail or over the phone. Regardless, if you accept either of these types of orders, you will still need an electronic way to process the payments. This requires that you have a virtual terminal to process credit card payments. A virtual terminal is essentially a software program that allows you to take credit card information over the phone or via mail and then enter it into the terminal. You can either enter that information as soon as you receive it, or wait and do batch transactions of all of the orders you receive each day. That virtual terminal then sends the information to your merchant account provider for processing.
Electronic Checks and Gift Cards
An electronic payment system isn’t just for credit card processing. It can also be used for processing electronic check payments and even gift cards. In order to accept these kinds of payments, you do need to verify that your merchant account provider can process those types of payments.
Accepting electronic payments is now a must for your business, especially if you want to succeed on the internet. With the right merchant account provider, you can easily accept these types of payments and make your business more successful.