Payment processing for an online store or business is much like the transaction that would take place between a customer and merchant in any corner store across the country.  Where they do share a lot of the same steps, there are some differences you may need to be aware of when it comes to shopping or selling your goods, even if they are web hosting accounts.

Starting the Shopping Process

Now in what could be considered your Brick and Mortar offline store, a customer picks up the item he wants, brings it to the cashier, and then hands them their credit card to pay for the items he wants.  In the online world, the customer visits a web site, picks out the item he wants and then goes through that web site’s checkout process.  During this process he inputs his personal information and credit card details.

Processing the Payment

Going back to the corner store, the store’s cashier will swipe the credit card through a point-of-sale terminal.  Then the point-of-sale terminal routes the information to the payment processor (usually via a dial up connection).  There they take the amount due for the item being purchased, and then send the transaction results to the point-of-sale terminal.  When shopping online, after you give them your credit card and personal information the online store will send your request to a payment gateway.  That payment gateway then routes the information to the processor, who in turn, takes the charge due.  The processor will then send the transaction result back to the payment gateway and the payment gateway passes the end result to the merchant.

Delivering the Goods

Once the corner store gets the payment that is due, the customer will sign the credit card receipt and get the item he paid for.  In the online world, the payment gateway will tell the online store the payment was either good or bad.  If the payment was good, then they will ship the item that was paid for.  Now, because the card is not present at the time of the transaction, the online store should take additional precautions to make sure there is no credit card fraud going on.  This can sometimes delay processing and shipment time of the order and item paid for.

As I said before, both buying goods from an offline corner store and buying goods from an online store share a lot of the same processes, they just take different steps to get to the end result.  Anyone dealing with online orders should be taking more precautions, due to the fact that you don’t have that face to face meeting – as you would in a corner store environment.