Guide to Digital Payment Solutions
This article explains the essentials of online payment systems, including payment gateways, processors, providers, and merchant accounts. It covers how transactions are processed, verified, and completed, emphasizing the importance of a merchant account and multiple payment options for online businesses.
Online payment systems are often described using terms such as payment gateway, payment processor, payment provider, or merchant account. These entities act as intermediaries between your website, your customers, and your bank accounts, facilitating smooth online transactions.
A payment gateway captures payment requests from your site and forwards them to the payment processor.
The payment processor verifies the customer's credit card details and checks available funds.
Post verification, if sufficient funds exist, the payment proceeds successfully. The payment status is then communicated back through the gateway to your website.
Many payment providers offer multiple payment options, collectively known as payment methods.
To accept online payments, you need a merchant account, which enables your store to process transactions.
When transactions are finalized successfully, funds transfer from your merchant account to your business bank account. Payment services themselves do not store funds; they only facilitate the transfer process.
Understanding these terms helps clarify the online payment ecosystem and ensures smoother transactions for your business.
