e-commerce 101 - Payment Processing

What is payment processing?

Payment processing is the electronic means of exchanging information in a credit card transaction between the shopper at the storefront, the merchant's payment processor and the merchant's financial institution. A payment processor, often called a payment gateway, allows for real-time transactions to be conducted online during the checkout process.

How does payment processing work?

After a shopper submits a purchase transaction online using a credit card, the data is encrypted for security purposes (SSL or Secure Socket Layers) and then sent to a payment gateway server. The payment gateway then forwards the encrypted data to a financial institution for validation of the requested transaction. The financial institution linked directly to the payment gateway sends an authorization code or a decline message back to the gateway. This information is then forwarded back to the merchant and to the shopper at the storefront. The entire process can take place in a matter of seconds. This is known as "real-time" payment processing. Captured credit card funds are then deposited into your merchant account in accordance with the terms of your payment processor and merchant account agreements.

Do I really need a payment processor account?

While not everyone needs an real-time payment processor (or gateway) account to accept credit cards, there are many benefits to having one. A payment processor will eliminate the need for you to process credit cards manually, saving you time and effort while reducing the risk of data entry errors. In many cases, a payment processor service may offer you greater protection against credit card fraud than your offline credit card processing system.

Depending on your service provider's StoreSense configuration, you can still accept credit cards in your StoreSense store even if you choose not to process credit card transactions in real-time (while the shopper is checking out). StoreSense can be configured to accept many other means of payment, including electronic checks, traditional paper checks and money orders. StoreSense Pro even includes options for accepting COD, certified checks, department orders and purchase orders. One can also leverage the integrated services offered by PayPal. PayPal will allow you to accept credit cards from your customers without requiring a merchant to have Internet merchant account. None of these other types of payment require credit card processor/gateway.

Can I add real-time credit card processing to my store later?

Certainly. Even if you start without a real-time processor, it's a quick and easy process to enable the service at a later date (assuming your existing merchant account provider supports one of the payment processors integrated with StoreSense).


What payment gateways are integrated into StoreSense?

StoreSense is fully integrated with the following popular payment gateways. This means that no additional software is required for you to install. In fact, some of them incorporate online merchant account applications directly into their solution.

Payment Gateway Company Web Site
ANZ eGate ANZ www.anz.com
Authorize.net Authorize.net www.authorizenet.com
BluePay Gateway Online Data Corp www.onlinedatacorp.com
Concord EFSNet Concord EFS, Inc. www.concordefsnet.com
CyberCash Verisign www.cybercash.com
CyberSource CyberSource www.cybersource.com
Innovative Gateway Innovative Gateway Solutions www.innovativegateway.com
iTransact iTransact Inc. www.itransact.com
LinkPoint API LinkPoint International www.linkpoint.com
NobelPay Nobel Electronic Transfer, LLC www.nobelpay.com
Payflow Pro Verisign www.verisign.com
PayFuse First National Merchant Solutions www.fnms.com
PayGateway Paradata Systems Inc. www.paradata.com
Paymentech Orbital
Paymentech www.paymentech.net
Pay Me Now PayMeNow Payment Gateway and Virtual Terminal www.paymenow.com
PSiGate Payment Services Interactive Gateway, Inc. www.psigate.com
QuickCommerce Pro E-Commerce Exchange www.ecx.com

Electronic Check/ACH Processing

Product Name Company Web Site
Electronic Check/ACH Processing Electracash www.electracash.com

Other Payment solutions

StoreSense also includes integration for the payment solution services provided by:

PayPal PayPal
WorldPay WorldPay

Can I use a payment processor other than the ones listed above?

Yes. StoreSense is designed to allow third-party payment processors other than those listed above to be integrated into the application. However, using a third-party payment processor may incur additional cost to you.

How do I know which payment processor is right for me?

Choosing your payment processor is the critical first step toward conducting transactions online in real time. Payment processors conduct transactions differently and are linked to different merchant account providers.

If you are just getting started, it's best to choose the StoreSense-integrated payment processor that meets the needs of your business, and then choose an associated merchant account provider. If you already have an Internet merchant account, check with your provider to see if any of StoreSense's built-in payment processors are compatible. For more information on merchant accounts, see Merchant Accounts.

How much does payment processing cost?

Payment processing fees can vary widely, depending on the provider. Charges may include application fee, set-up fee, monthly fee, discount rate (percentage of the transaction value) and fee per transaction. Do your research carefully and be cautious of hidden fees.

What are some resources for learning more about payment processors?

E-Commerce Guide (Internet.com)