How Payment Companies Deduct Money From Your Account When Making Online Payments

Payment technology (Paytech) is a WIN-WIN for both sellers and buyers on the internet.

Thanks to the ease, speed, and security it offers both parties, paytech helps merchants build better relationships with their customers.

And it allows customers to perform their online shopping activities with one eye closed.

Interestingly, only a few customers and business owners know the transactional flow of their website payment system.

Knowing how a payment request journeys through approval and funds transfer is important enough.

But knowing the roles of merchant accounts, payment gateways, and payment processors, can help you make payment software decisions that keep you steps ahead of your competition.

The online payment process begins when:

• The customer submits their credit card details on your payment page.
• Upon the submissions, the payment gateway swings to action. Its goal is to securely transmit the credit card and transaction information to the credit payment processing company.
• The payment processing company sends the data to the Card Networks (MasterCard, Visa, and the likes)
• The data then goes from the card networks to the card-issuing bank.
• The issuing bank will check the information and customer's account for any irregularity.
• If everything checks out, it will approve the transaction and send the approval code back to the payment processing company.
• The processing company will then signal your Payment Gateway to send your customer to your "Thank You," or equivalent page.
• This communicates transaction success to the customer.
• The issuing bank then remove the money from your customer's bank (issuing bank) account to the payment processing company.
• The payment processing company then sends the money to your merchant account.
• From your Merchant account, the money goes to your bank (acquiring bank) account.
• And the issuing bank sends the transaction bill to your customer.

As interesting as it sounds, this long list of steps takes a second or two to complete.

Thanks to a sophisticated web of technological devices available all parties to the transaction.