This concept refers to the field of online payments. Processing is a series of consecutive Internet operations that provide cashless payments between the buyer and the seller.
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Types of payment processing and its participants
There are two types of processing:
- Bank card processing.
- Processing electronic payments.
But in any case, it involves several intermediaries for the transaction between the seller and the buyer:
- Issuing Bank.
- Bank Acquirer.
- Processing center.
We give a definition to each participant.
Issuing Bank – the bank that issued the card, through which the buyer pays the seller for the goods / service. In the case of electronic payment processing, this role is played by the electronic payment system (Yandex Money, Qiwi, etc.)
Acquiring Bank – a bank that receives money from a buyer to a special merchant account, converts it into the desired currency and transfers it to the seller’s account.
Processing center – a company that provides protection and processing of information, through which there is a cashless payment between the buyer and seller.
Payment processing in detail
First, consider the processing of bank cards. When paying for goods, the following operations occur:
- the buyer inserts (brings) a bank card to the terminal and he reads the necessary information from it.
- the processing center transfers this information to the payment system (Visa, MasterCard, etc.) to which this card belongs.
- The payment system transmits information to the issuing bank, where authorization and confirmation of the possibility of payment take place (there is a necessary amount on the card).
In case of successful authorization, the issuing bank informs about this through the processing center. The latter writes off the necessary amount from the buyer’s card and stores it himself.
At the end of the day, the processing center transmits all the information accumulated during the day on transactions of the payment system. At this stage, the seller does not receive money.
The payment system within 3 days processes the information received, summarizes it and transfers the information on money to the acquiring bank through the processing center:
- how much must be transferred to each seller for the goods sold by them;
- how much the bank earned for the services it provided to provide merchants accounts to sellers;
At the same time, the processing center informs the bank how much it needs to pay for the services rendered.
In fact, in this case, the payment system acts as a regulator, breaking up the bank balance every day – how much other banks owe it and how much it owes them. There is a mutual offset of money. This significantly reduces the volume of payments. This is called bank clearing.
Transferring money to the merchant account of the seller
Having received information from the processing center, the acquirer bank transfers the necessary amount to the merchant’s account of the seller.
And then, converting it into the necessary currency, transfers the money to his bank account. However, this bank account does not have to be with an acquiring bank.
The difference between electronic payment processing
In this case, bank cards and terminals are not physically used. Payment takes place on special pages of the seller’s website or payment system. On them, the buyer enters the necessary information for the purchase:
- bank card number, expiration date and CVV;
- purchase amount;
- authorization code (usually comes in SMS to the buyer’s phone, which is tied to a credit card).
If payment is made by electronic money (Qiwi, Yandex Money, etc.), then authorization and payment are made on the payment system website page.
How to choose a processing center
The described mechanism of non-cash online payments clearly shows what an important role the processing center plays. What criteria should be followed when choosing it? It would seem that the answer is obvious. Give preference to the acquiring bank. Indeed, many large banks began to provide processing services. But it should be understood that this service is secondary to them and it is better to give preference to companies whose main activity is to operate as a processing center.
There are several selection criteria:
- Security. No one has canceled the threat of hacking, and in this case the losses can be very significant. After all, you can write off all the money from your bank account.
- Service cost. Any processing center for its services takes a percentage for each transaction made through it. With a large volume of payments, a difference of one to two percent in absolute terms can be significant.
- The number of currencies and payment systems with which the processing center works. Currently, there are dozens of currencies and payment systems. And it is quite possible that a particular processing center may not serve this or that currency or a payment system. Namely, you need them.
Processing center WellcoinPay
WellcoinPay is an international company providing processing center services for more than 10 years. Now we will go through the above criteria:
- Security. WellcoinPay uses state-of-the-art 3-D Secure and Secure Socket Layer (SSL) security protocols in its software. At the same time, company employees are constantly working on improving software.
- Service cost. Due to the large number of customers (the international company WellcoinPay operates in more than 180 countries), we can afford to offer tariffs, some of the lowest on the market.
- WellcoinPay works with 53 payment systems and more than 20 currencies. We offer our clients to open a merchant account with us, where any money from all transactions will come. Next, we convert them into the currency we need for the client and send them to bank accounts in the banks of their choice. At the same time, their customers may have several acquirer banks, depending on the payment systems and currencies with which he works.
But that is not all. WellcoinPay offers its customers the services of a processing center for payments in cryptocurrency, which is rapidly gaining popularity. And not only for its most popular form – Bitcoin, but also for several other types. This offer is especially relevant for high-risk businesses.
Summarizing the above, we can say that WellcoinPay is:
- 10 years of experience in the international financial market;
- 200+ served companies in more than 180 countries;
- 53 supported payment systems and 20 currencies;
- work with crypto currency;
WellcoinPay is a reliable and convenient international processing center.