Analysing The Online Shopping Payment Mode


Shopping Customers have increasingly started using the available online options, as their mode of technology access and comfort zone is growing. To sustain in this competitive world, it has become a necessity to set up online stores allowing customers to shop quickly and securely in addition to the available physical factory.The ultimate success of your online business lies in making smart choices in the payment mode.

The moment you start receiving the credit or debit e-card from customers, you have to come across the various payment landscapes that can assist you to make payments to the organization that handles them.

A basic intro to the current payment providers

  • Merchant bank: Also known as the merchant acquirer is the entity who set you with a merchant account. Further, this connects you with your payment processor enabling to collect funds. On customer shopping, payment is processed by using an e-card and funds are debited from your customer’s account by the issuer and the last step to taking money to your account is the duty of an acquirer.
  • The Payment by Technology scheme: This includes a payment gateway connecting you to a website to the payment processor. Additionally, helping you with effectively transferring money from customer’s account via an issuer into merchant’s account.You also have the option of physically entering the card information on a virtual terminal or just wiping a card if you wish to make the payment personally. The whole process is authorized.
  • Customer’s view: This is the simplest and quick mode of electronic payment with respect to customers’ view. They can choose to shop with the credit card and step out easily.

About the payments

The journey of payment series is completely invisible to both the customers and the businesses. Once the card is keyed-into the swiping machine and the ‘buy now’is hit, it goes through many in-between stages operated by various players before they reach your account. The players also charge an amount for processing these transactions.

Know about the basic types of intermediate fees

  • Interchange fee: This is the payment fee to the issuer and it varies depending on the industry, purchase amount and even on the card-type used. This fee has calculated the sum of 2% of the volume and 0.10$ per every transaction made.
  • Assessment fee: This is the fee charged by the credit card associations and can be tallied as the sum of 10% of volume and 0.02$ per transaction.
  • Markup fee: This is the only negotiable fee charged by the merchant bank, the gateway and the payment processors. It is the sum total of 0.25% of volume and $0.10 per processing.
  • Extra fees: These are the ones charged for hardware set up, monthly usage and even include account cancellation.

In general, a better understanding of the pricing models and fees can really help you with wisely choose your payment service.