How does the payment process work? (2024)

FAQs

How does the payment process work? ›

The customer provides their payment details—like card number or bank account information—at the business's POS, card reader, or ecommerce checkout. The payment information is securely transmitted to a payment gateway, which encrypts the data and forwards it to the payment processor.

Card payments are a cashless payment method where customers pay for their purchases with their debit or credit card, either via a point of sale (POS) or online. The amount is debited directly from their bank account, or if they pay via credit card, they're charged at a later date.

The issuing bank transfers the funds to the credit card association. The credit card association passes the funds on to the acquiring bank. The acquiring bank deposits the funds in the seller's account. The issuing bank deducts the funds from the customer's account and closes the transaction.

A payment method refers to the various options available for customers to make payments when purchasing a product or service. Whether in a physical or online store, payment methods cover a range of choices. Commonly accepted payment methods include cash, credit cards, debit cards, gift cards, and mobile payments.

A payment processor is a company that manages the credit card transaction process, acting as a kind of mediator between the bank and the merchant. Put simply, the payment processor communicates information from your customer's card to your bank and the customer's bank.

A payment flow, also known as a checkout flow or payment process, is the sequence of steps a customer goes through to complete a transaction on a website or app. It typically involves selecting products to purchase, entering payment information, selecting shipping options (if applicable), and confirming the purchase.

Merchants send batches of authorized transactions to their payment processor. The payment processor passes transaction details to the card associations that communicate the appropriate debits with the issuing banks in their network. The issuing bank charges the cardholder's account for the amount of the transactions.

Payment processing is a series of actions that securely transfer fund between a payer and a payee during digital payment transactions. These actions involve secure payment gateways, banks, and consumer accounts to facilitate the exchange of funds for goods and services.

The customer swipes, inserts or taps their credit card or mobile device, or enters their credit card number, to input their information into the payment processor. The payment processor communicates with the card's issuing bank to ensure available funds or credit limit and detect potential fraud.

Online payment methods

To make a purchase, customers enter their credit or debit card information into a payment gateway. This method involves the transfer of funds directly from the customer's bank account to the business's bank account, not their merchant account.

Which mode of payment is faster? ›

RTGS : Fastest Mode of Money Transfer - payment process.

Stripe is free to set up and the company does not charge a monthly or annual fee for its services. Instead, all Stripe fees are per transaction with transparent pricing. Online sales cost businesses 2.9% plus 30 cents per transaction. There is an additional 1% fee for international and currency conversion transactions.

Payment processing is the sequence of actions that securely transfer funds between a payer and a payee. Typically, it involves the authorization, verification, and settlement of transactions through electronic payment systems.

The 'payments system' refers to arrangements which allow consumers, businesses and other organisations to transfer funds usually held in an account at a financial institution to one another.

Payment terms provide clear details about the expected payment on a sale. Often, payment terms are included on an invoice and specify how much time the buyer has to make payment on the purchase.

Terms of payment set your business's expectations for payment, including when clients pay and what penalties they may receive for missed payments. With this outline, your business can receive payment more easily and make the payment process more transparent to customers.

There are three stages to payment processing: validation, reservation, and finalization. The payment life cycle is related to the order life cycle stages: order capture, release to fulfillment, and shipping.

It generally takes one to five business days for a credit card payment to post to your account. Your payment may even be credited to your account before it posts. In other words, your card issuer may acknowledge receipt of the payment before the transaction is fully processed.

A payment run evaluates an account's electronic payment method and uses that method to collect payments for outstanding invoices. A payment scheduler controls when Salesforce Billing launches a payment run and whether the run is a one-time event or based on a recurring schedule. Payment Run Processes.