Using your Merchant Account
Terminals, Gateways, and Payment services
The process of e-commerce, starting from making orders online to receiving delivery, involves many processes. A merchant who wants to take credit card orders must establish a merchant account since it is required for accepting customer credit card and electronic payments. Once you have your merchant account ready, you need tools to transfer funds to your bank. Hence you need to have terminals and gateways. Terminals and gateways enable smooth and speedy financial transactions, irrespective of distance and geographical location. Terminals are broadly classified as physical terminals, software terminals, and virtual terminals.
A physical terminal consists of machines for receiving credit card and checks. Credit card machines, keypads or other equipments may be used for this purpose. At a physical terminal, the credit cards of customers can be inspected, swiped and signatures can be matched before accepting payments. This type of terminal ensures that there are minimum fraudulent activities since the credit card and details can be visually inspected.
Software terminals, as the name suggests, uses software applications to accept credit card charges and credits. A computer is mandatory this system and it is used to transfer data to the processor using modem and telephone lines. It is a low cost alternative, but at the same time efficient and fast.
A virtual terminal uses the web browser and the Internet. This terminal performs the functions of checking and validating payments through a web page interface on the Internet. An Internet payment gateway is used in a virtual terminal to take the credit card information from the virtual terminal to the credit card processor, and returning the information of approval/disapproval. Gateways also store the client’s credit card information on the processor's server. For efficient functioning, the payment gateway service must be compatible with the shopping cart package. Security maintained in this system is high, since the validation is done in a real time manner over the Internet. The process of verification takes only a few seconds. On verification, the funds are received and the deliveries of goods may be done. In this system however, there is a certain amount of risk involved (for fraudulent payments), since physical and visual inspections of credit cards are not possible.
Payment services include all services such as web hosting to sell goods online, accepting credit card/debit card payments and using shopping cart system. Services may also include other features such as keeping track of customers orders and updating inventory among others.