Payments Processing

Payments Processing

Any online shop needs a payment processor to have a possibility to accept payments from their customers. A payment processor manages the credit card transaction process by acting as the mediator between the merchant and the financial institutions involved.

There are four main entities involved in a card transaction:

  • Merchant - the owner of the website where payments are processed.
  • Cardholder - the customer who uses their credit or debit card to make payments on the merchant's website.
  • Acquiring bank - a bank or financial institution that processes credit or debit card payments on behalf of a merchant.
  • Issuing bank - a bank that offers card association branded payment cards directly to consumers, such as credit cards, debit cards, contactless devices such as key fobs as well as prepaid cards.

What is a payment gateway?

In brief, it is an online payments' service that, when integrated with the e-commerce platform, is devised as the channel to make and receive payments. There are several processes included:

  • Card authorization. Card authorization allows you to accept a credit/debit card payment from a customer and, within a matter of seconds, have the card transaction approved over the Internet by your bank. The card issuing bank either approves or declines the transaction and forwards the response to Epayoo.
  • Clearance. As soon as Epayoo sends the transaction information to the card networks, the card networks validate the information and start the transfer of funds from the cardholder to the acquirer.
  • Settlement. Epayoo receives funds from the cardholder's issuing bank and sends the funds to the merchant.