| By :
Joe Maldonado
Copyright (c) 2011 Joe Maldonado Online businesses have become very popular and the most important aspect that they need to address properly is that of payments. Because of the debit cards and credit cards, paying the businesses has become simple and easy and fast. The traditional payment methods like paying in cash or paying checks have now almost become obsolete. Those businesses which make use of the traditional payment methods also lose business and this can be a real problem for them. Thus, every business whether online or brick and mortar, must make use of some kind of credit card processing system. Especially for the online businesses, traditional methods do not work well. They depend mainly on credit card processing. So, if you have an online business and you want to set up an online credit card processing set up, the most important thing that you need to understand is the payment procedure. However, you will not be able to understand the payment procedure properly unless and until you understand the different technical terms. So, let us understand those technical terms today. Understanding Jargon: Acquirer: An Acquirer is a bank which processes the transactions of the merchants by taking help of the card issuers. Issuer: An organization issuing credit cards is called the issuer. Payment Gateways: Payment Gateways are none other than middle men (processors) responsible for account information verification of the customers. They also act as funnel through which the merchant account is credited using the money debited from the accounts of the customers. Card Network: The networks which are commonly used are American Express, Visa, Discover and MasterCard. These payment methods form a bridge to the issuer from the acquirer so that the credit card transactions can be authorized. Batch Processing - This is the method of collecting all the transaction throughout the day. The collection is called batch. Thus, technically batch processing is nothing else but processing all the transactions taking place throughout the day at one single go. The terminal where the credit cards or debit cards are swiped can be set to manual or automatic processing. In case of automatic processing, the terminal collects all transactions and at the end of the day, the batch is sent to the processor automatically for processing. On the other hand, in manual mode, the batch is to be formed manually and command is to be sent manually to the processor for closing or processing. Automated Clearing House - It is a method where one bank account is linked to the other for electronic payment. Once the business owner debits the account of the customer, the transaction starts. In this method the business owner needs to submit the ABA numbers, the ACH file containing account numbers and amount to be debited. Understanding these terms clearly can help the business owners to properly set up a credit card processing system for their online business. Improper understanding will lead to loss and other payment related problems.
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