Overview Of The Global Payment Processing Industry

by Pay Tabs PayTabs
As per the McKinsey Report of 2015, “The global payments industry will continue to grow at a healthy rate over the next five years. But there will be a rebalancing of revenue sources and powerful disruptive forces will begin to reshape the global landscape”. 

At one point Of time, there were simple one-on-one transactions. You just had to offer cash in exchange for goods you needed to purchase. But things have changed in the past decade. The global payment processing network now involves card networks, gateways, processors, acquirers and more. 

For effective business management, security and efficiency overpayments are very critical. Businesses require a secure platform to manage international payments. Global payment gateways can empower payments as they are designed for domestic as well as multi-national payments. 

A payment processor handles the transactions between the merchant and the customer. It transmits the payment information from the customer to the merchant’s bank account. A payment processing involves a customer, the merchant, the payment processor, the payment gateway, the bank/credit card company of the customer and the bank of the business.

Let us understand the different stages of global payment processing and how these stages make the transaction process seamless for a user. 

The first stage is called the authorization. In this, when the customer swipes his card on the checkout page, the transaction details go through the terminal to the acquiring bank. The bank then sends an authorization request to the customer’s issuing bank to check if there are enough funds. The issuing bank then sends the authorization code to the acquirer, which sends it back to the merchant to complete the transaction. 

At the next stage, all the transactions of the day are clubbed and sent to the acquirer, which then requests the payment on behalf of the merchant from the ecosystem of card networks. These card networks will then send the request for funds to the relevant issuing bank.

Lastly, the final stage is called funding. Here, the issuing bank will send the necessary funds to the acquirer through the card network after deducting a small fee. The card network will then transfer the funds to the acquirer. 

In A Nutshell, This is How Global Payment Processing Works:

  • The shopper submits their order on the e-commerce website.
  • The transaction request from the merchant is captured by the payment gateway.
  • The request is routed to the acquiring bank.
  • The acquiring bank quickly runs its fraud checks and based on it, can either approve or decline the transaction. If the transaction is approved, it is routed to the issuing bank.
  • The issuing bank can either approve or decline the transaction. The response is sent back to the payment gateway via the acquiring bank.
  • The payment gateway presents the response to the shopper.

There are hundreds of global payment processing companies, but you should choose the one that offers the best experience for you and your customers.

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About Pay Tabs Innovator   PayTabs

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Created on Sep 13th 2018 03:54. Viewed 689 times.


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