In our previous article post, we wrote on useful tips on how to start and maintain a business franchise successfully for our prospective business owners. Here’s another benefiting article on knowing the best online payment solutions for business owners and how to choose the right one. Stay tuned and enjoy reading the article.
Online payment solutions are crucial to starting an online business. They let organizations securely accept different currencies and payment methods, from credit cards to digital wallets, making purchasing easier for customers.
To help you choose the best one for your business needs, we’ll go over some online payment solutions which are the best around and discuss each option’s key features, pricing, and drawbacks.
Firstly, let’s look into the terminology of online payment methods and discuss how they can benefit your business.
What Are Online Payment Solutions?
Online payment solutions are software outlets that enables businesses to receive money and pay via the internet.
We have observed that people often use various terms interchangeably to refer to an online payment solution, such as an online payment service and a payment gateway. While these terms have different meanings, they all take part in online transactions.
Let’s look at some of the most important online payment terms to understand what they mean. Below is an illustrative flow chart on how online payment is processed from one gateway to another.
The above illustration shows how each payment gateway plays it part in the payment chart process to give a better understanding.
- Payment Processor
A payment processor is a software service that authorizes a purchaser’s payment information and checks whether they have enough funds in the account to pay.
If successful, payment processors will transfer the funds to the merchant account, transmit back the transaction status to the payment gateway, and send a success status message to the merchant’s website. However, customers with insufficient funds will receive a declined status message.
- Payment Gateway
A payment gateway acts as the middleman between your website or point-of-sale (POS) system and the processing bank or payment processor. It makes sure the customer’s payment details are encrypted, stored securely and then sends them to the payment processor.
- Payment Provider
A payment provider, also known as a payment service provider (PSP), is a company operating payment gateways or processors or both.
A payment provider works with multiple banks and card networks, which can make businesses accept various payment methods, including:
- Payment apps like PayPal
- Flutterwave
- Paystack
- eWallets such as Apple Pay and Google pay.
We will continue in the next Article. Stay tuned……….
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