An Overview of Payment Processor And The Process Involved Payment processoralso known as a third party company performs credit card transactions for the vendor acquiring banks. This is mainly used of the processing of credit cards. Credit cards are the one which are provided by the banks to its customers. Credit cards are used to do online shopping, paying bills online etc. Payment processor for a transaction will verify the details that it receives by sending those details to the issuing bank. Subsequently, it will take some anti-fraud measures so as to safeguard the transaction. It will also check for other details like issuing country of card previous payment history etc. After successful verification of the card details and if the transaction is valid, information will be sent to the vendor who will then be allowed to finish his/her transaction. If the verification is denied by the card association, then information is sent to the vendor who will then have to reject his/her transaction. This payment processor can be categorized into two types, i.e.
Front end payment processor: These front end processors will be linked to different card organizations, supply approval and will provide payment services vendor banks vendors.
Back end payment processor: Once the whole front end processing is done, the back end processors will receive settlements from the front end through the Federal Reserve Bank. After this, back end processor will transfer money from the issuing to the vendors’ bank.
Payment processor now in the modern times is known as software as a service (SaaS). This is a single electronic portal which will allow the merchant to perform various tasks at a time like scanning of checks which is well known as remote deposit capture (RDC), processing single and returning credit card payments, processing single and returning ACH and cash transactions and also for processing allowances and online payments. The main advantage of this modern payment processor is that it reduces the cost, speeds up time to market, provide secured and also better quality transaction.
Payment processing also known as transaction processing is the term which is used to explain the process and also the service which automates the payment transaction that happen between the customer and vendor. This can also be called as process of distributing funds between the shopper and the merchant. This is an online system which does the whole process of processing, verifying, accepting or declining the credit card transaction on support of the vendor. Several companies provide these payment processing services.
In today’s modern world, this payment processorhas become an integral part of the vendors’ account industry. Some of the payment processing software solutions are not compatible with the vendors account. So, it is very essential for a vendor to do some research of the product and to choose the trusted one before starting to use. This can help in getting safe and secure transaction for a credit card.