It is important to do thorough research and analysis prior to making a choice about an online payment processor. The best one should be compatible with the payment methods your customers use and provide solutions to guard against chargebacks, fraud, and more. Our editors have researched, rated and compared several top-performing products according to their capabilities, coverage options and customer experience. They also considered costs as well as customizability, among other aspects.

A business needs an account with a merchant, payment gateway, and payment processor to process credit card payments. A payment processor is an institution which manages all details of transactions and transfers transactions across the processing network, and works with banks to make sure that you are paid for your goods or services.

The process starts when a user purchases a product through your site using credit or debit card. The customer enters their payment details into a form on your site which is then encrypted and transmitted it to the payment processor using the payment gateway. The processor contacts the card issuer and determines if the cardholder has enough credit to cover the transaction. When the issuing bank accepts or denies the payment, the processor sends a response to the gateway and to your website. The message may be simple: “Your payment has been click this link now approved” or more detailed: “Your payment has been rejected.”

The processor then sends the data from the day’s transactions to the card network and transfers the funds from the card issuer to the merchant bank (acquiring bank). After a brief period of settlement, the acquiring banks transfers the funds to the account of your merchant. The entire process generally takes just a few moments.