According to a report published by Pricewaterhouse Coopers, cashless payment transactions will rise by over 80 percent globally, going from 1 trillion to 1.9 trillion transactions between 2020-2025. Payment processing is a significant function for any e-commerce or online business. Payment processing platforms accept and approve electronic payments, such as credit card and debit card transactions. They facilitate the transfer of funds between customers and merchants, making it possible for businesses to sell goods and services online.
A credit or debit card transaction may appear straightforward, but a lot happens behind the scenes. For example, when using a credit or debit card to make a purchase, various electronic actions take place to complete the transaction, including payment processing, verification, acceptance or decline, and money transfer. Although the transaction may be quick, the underlying process is intricate.
The payment processing process begins when a customer initiates a transaction by entering their payment information into a merchant's website or mobile app. It also happens when a customer presents their card for in-store payments. The card information is then sent to the vendor's payment processor, which acts as an intermediary between the merchant and the customer's bank. The payment processor checks the validity of the payment information, such as the credit card number and expiration date, and then sends the transaction details to the customer's bank for approval.
Once the customer's bank approves the transaction, the payment processing platform facilitates the funds' transfer from the client's account to the vendor's account. The process usually takes seconds, and the customer is immediately notified of the transaction's status.
Payment processing services benefit businesses in several ways. Online payment platforms allow businesses to sell their goods and services online, significantly increasing their customer base and revenue potential. Companies also gain from having multiple payment options. When making payments, clients need various options, from cash, cards, bank transfer, or via their mobile devices. Payment processors give merchants a platform to have a variety of payment alternatives that suit them.
Payment processing services also help in the integration of business workflow. Some payment platforms are easily integrated into business systems. This allows easy monitoring of other business metrics such as billing, accounting, and customer relationship management.
Businesses also benefit from direct payment processor relationships. Direct relationships offer advanced customer service, expert troubleshooting, data security assistance, fraud protection, and direct pricing models that can result in significant savings. This is unlike working with third parties who resell the services of payment processors.
Another benefit is that payment processing services ensure that transactions are secure, reducing the risk of fraud and chargebacks. Additionally, they provide detailed transaction reports and analytics, which can help businesses better understand their customers and make informed business decisions.
Payment processing services are an essential part of any business, online or in-store. They facilitate the transfer of funds between vendors and customers, making it possible for businesses to sell goods and services and transfer money online. They also provide secure and fast transactions and detailed analytics, which can help businesses make informed decisions.
