What Do Merchants Need to Be Successful Online?marketing.nmi.com/credit-card-processing-101.pdf ·...
Transcript of What Do Merchants Need to Be Successful Online?marketing.nmi.com/credit-card-processing-101.pdf ·...
WhatDoMerchantsNeedtoBeSuccessfulOnline?Understandingalloftheworkingpartsinvolvedinyourmerchantcustomers’successonline
DomainRegistrar
Web/AppDeveloper
WebHos@ng
ShoppingCart
Accep@ngPayments
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TheCommonMerchantStruggle:
ThisisJoetheMerchantHewantstosellbluewidgetsonline
Findagoodwebdeveloper
Registeradomainforhisecommercewebsite
Decideonahos@ngcompany
Selectashoppingcartprovider
Piecingtogetheralloftheworkingpartstogettheirecommercestoreupandrunning
Todothis,heknowshewillneedto:
andevenaJerallofthat,thereiss@llonemissingpieceJoeneeds….
Accep:ngpayments
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MerchantAccount• Amerchantaccount,alsoknownasaMID
(shortforMerchantID),isatypeofbankaccountthatenablesmerchantstoacceptandprocesspaymentsthroughdebit&creditcardtransac@onsandconnectsthemerchantwiththeprocessor.
• MerchantscanobtainamerchantaccountthroughaMerchantServiceProvider.
• Merchantaccountsareanecessityformanybusinesses,andareessen@alformerchantswithecommercebusinesses.
PaymentGatewayAccount• Ifamerchantwantstogetpaid,theyneeda
paymentgatewayaccount.• Apaymentgatewayaccountconnectstothe
processor&securelytransfersinforma@onbetweenthemerchant’swebsiteandtheirmerchantaccount.
• Apaymentgatewayiswhatauthorizescreditcardpaymentsandistheequivalentofaphysicalpoint-of-saleterminallocatedinmostretailoutlets.
PaymentProcessorAmerchantaccountand
paymentgatewayaccountbothconnecttotheprocessor&bothaccountsareessen@alinorder
formerchantstoacceptpayments.
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Let’sWalkThroughtheStepsWithJoe
Joe’sMerchantAccount• Joeappliesforamerchantaccountthrough
oneofthemanyMerchantServiceProviders.• TheMerchantServiceProviderhasalistof
requirementsgiventothembyitsacquiringbank(seeslide5fordefini@on).
• Joe’sapplica@onsa@sfiesalltherequirementsandheisgrantedaMID!
Joe’sPaymentGatewayAccount• Joeneedsapaymentgatewayaccountsohe
canconnecthisMIDtohiswebsite.• JoeopensagatewayaccountwithanNMI
Affiliate(thiscouldbeyou!)whichallowshimtoinputhisMID.
+ =
NowAccep@ngPayments!
NowthatJoeknowswhatheneeds,heisonlyafewstepsawayfromaccep@ngpaymentsonhisecommercestore
HowDoesCreditCardProcessingWork?Understandingalloftheworkingpartsinvolvedinprocessingacreditcardtransac@on
Cardholder
Merchant
AcquiringBank
IssuingBank
PaymentGateway
PaymentProcessor
CreditCardNetwork
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KeyPlayersinProcessingaCreditCardTransac@on
AcquiringBank(MerchantBank)
PaymentProcessor
PaymentGateway
CardholderAcardholderissomeonewhohasobtainedacreditordebitcardfromacardissuingbank.Theyaretheonewhobeginsthecreditordebitcardtransac@onbyusingtheircardtomakeapaymenttoamerchantfortheirgoodsorservices.
Merchant
Amerchantissomeonewhowantstoacceptcreditanddebitcardpaymentsfromtheircustomers(cardholders)forthegoodsorservicestheysell.Theymustobtainamerchantaccountandsetupapaymentgatewayaccountbeforetheycanstartaccep@ngpaymentsandgetpaid.
Theacquiringbankisalsoreferredtoasthemerchantbankbecausetheycreateandmaintainmerchantaccountsthatallowamerchant’sbusinesstoacceptcreditanddebitcards.
IssuingBank(CardholderBank)
Theissuingbankissuescreditcardstoconsumers.Theyareresponsibleforpayingtheacquiringbankforthepurchasestheircardholdersmake.
Thepaymentprocessorworkstoactuallyprocessthecreditcardtransac@onfromstarttofinish.Itdoesthisbyconnec@ngthemerchantaccountwiththeNMIGatewaysoitcanreceivethetransac@ondetailsanditalsoconnectstheNMIGatewaytotheCreditCardNetworkforauthoriza@onfromtheissuingbank.
Apaymentgatewayauthorizescreditcardpaymentsandiswhatsecurelytransferspaymentinforma@onbetweenthemerchant’swebsiteandtheirmerchantaccount.
Lookit’sJoe!
ThisisSuzi
Joe’sBank
Suzi’sBank
Joe’sProcessor
Joe’sPaymentGatewayAccount
CreditCardNetworkThecreditcardnetworkhelpstoconnecttheissuingandacquiringbanksbyrou@ngtheappropriatetransac@oninforma@onbetweenthetwobanks.
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CreditCardTransac@onFlow
1.SuzitheCardholderPurchasesaBlueWidgetSuzihasbeensearchingfortheperfectbluewidgetand
aJerfindingJoe’sBlueWidget’secommercesiteshedecidestobuyone.Sosheentersinherpaymentinfoandsubmitsthetransac@on.
2.Suzi’sTransac@onDetailsareSenttoNMITheNMIPaymentGatewayreferencesJoe’sMIDand
usingasecureconnec@ontothepaymentprocessor,routesthetransac@ondetailsontothem.
Joe’sMerchantAccount
Joe’sPaymentProcessor
Joe’sPaymentGatewayAccountwithanNMIAffiliate
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3.Joe’sPaymentProcessorReceivestheTransac@onDetailsAJerJoe’spaymentprocessorreceivesthem,theysendtherequestontothe
CreditCardNetworkwhoiden@fiestheissuingbankforthepaymentcardandsendstherequestontothem.
Joe’sPaymentProcessor
CreditCardNetwork
IssuingBank(Suzi’sBank)
4.Suzi’sIssuingBankApprovesorDeclinesTransac@onAJertheissuingbankchecksSuzi’saccount,theyeitherapproveordeclinethetransac@onandthentheresultsbacktotheCreditCardNetworkwhosendsitbacktoJoe’spaymentprocessor.
Step3
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Step4
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5.Joe’sPaymentProcessorRelaystheResultsbacktoNMIAJerJoe’sPaymentProcessorreceivestheresults,theyrelaythembacktotheNMIGatewaywhereNMIstorestheresultsandthensendsthembacktothewebsitewhereSuzi&Joeseetheapprovalordecline.
Joe’sPaymentProcessor
Joe’sPaymentGatewayAccountwithanNMIAffiliate
6.Suzi’sTransac@onwasApproved!NowthatSuzi’stransac@onhasbeenapproved,
JoecannowsendoutthebluewidgettoSuzi.
7.JoeGetsPaidTheissuingbank(Suzi’sbank)releasesthe
fundstotheacquiringbank(Joe’sbank).AJertheseglementperiodJoe’sbankreleasestofundstohisaccountwherehecanaccessthemoney.
Joe’sBank
Suzi’sBank