A Guide to Web Payment Processing


Payment Processing

A payment processor is a company that handles credit card transactions. Payment processors are usually broken down into two types: front-end and back-end. Front-end processors have connections to various card associations and supply authorization and settlement services to the merchant banks’ merchants. Back-end processors accept settlements from front-end processors and, via The Federal Reserve Bank, move the money from the issuing bank to the merchant bank.

How payment processing works

When a payment is submitted for processing, the payment processor will check the details received by forwarding them to the respective card’s bank issuing bank or card association for verification, and also carry out a series of anti-fraud measures against the transaction. The entire operation typically takes place in a few seconds. Once the payment processor has received confirmation that the credit card details have been verified, the information will be relayed back via the payment gateway to the merchant, who will then complete the payment transaction. If verification is denied by the card association, the payment processor will relay the information to the merchant, who will then decline the transaction.

Merchant Account

What is a merchant account? A merchant account is an account, typically a bank account that allows businesses to accept payments by credit or debit cards. A retailer can get a merchant accounts through a bank, credit card company, or other payment processors. Any merchant who wishes to take credit card orders must establish a merchant account.

There are three main types of merchant accounts to choose from:

(1) Internet accounts
Internet merchant accounts are used for internet transactions. An internet-based retailer sends payments through a virtual terminal or payment gateway to process credit card payments.

(2) Retail merchant accounts
Retail merchant accounts allow sales to be processed when the credit card is “physically present”; the credit card is swiped through a credit card terminal. Retail merchant accounts are most-commonly used in businesses such as grocery stores, restaurants, etc.

(3) Mail order telephone order merchant accounts (MOTO)
MOTO accounts are used less frequently than Internet and Retail accounts. A MOTO account is used when the credit card cannot be physically swiped. With a MOTO account, the merchant processes a credit card payments by entering the credit card information directly into a terminal – web-based or desktop-based software on a personal computer.

It is fairly easy, given the above three types of merchant accounts, to select the correct type of account for your business. However, be sure to do your research before selecting which merchant service provider to use for your business.

Shopping Carts

If you want to sell products online, then you need a shopping cart. The first step, if you haven’t already done so, is to select a webhosting company, the second step would be to install the necessary software and services:
– Payment processing gateway
– Merchant account
– Shopping cart

Though this is not an exhaustive list, the following article will provide a list of some of the things to consider when selecting shopping cart software.


The most important step in selecting shopping cart software is to understand what features you need to complete the transaction – including not only the ability to sell products online but also the features required to deliver the product to the customer.

Writing out features can be a complex and overwhelming process; fortunately, most shopping cart software vendors understand the process very well, so they have done most of the “hard” work for you.
Concentrate on the “unique” parts of your business, meaning special things that you offer – this could be member discounts, special shipping needs, etc. The special cases will most likely be the make or break features for the shopping cart software you decide to use.


There are a wide variety of shopping cart software vendors and a wide variety of visual styles for each product. As you evaluate various products, be careful not to select a product that does not match the look/feel of your website and/or your products.

You want your shopping cart to look good, but you also want the style to match the visual style of your website overall. If you have an established website, consider spending the extra time/money to theme the shopping cart so that it looks like your “main” site – this helps to provide a continuous experience to the prospective customer.

If the shopping cart looks dramatically different from your “main” site, your prospective customer may be left wondering if they’ve jumped to a new site and are about to be “had” by a scam.

If your new shopping cart is the entire site, then you are not constrained by a pre-existing style; however, make sure you pick a cart with a theme/style that suits the product you are selling.


The final thing to consider when selecting a shopping cart is whether it is being supported/developed by the vendor. There are a lot of companies who create and sell shopping cart software, so there is no shortage of options.
However, the risk for the business owner is that the software vendor goes out of business, or discontinues the products, and leaves you (the business owner) with a product that will become outdated or (worse) unsupported leaving you with no assistance should you require technical support. Selecting a product from an established company may cost you more; however, there is generally less risk that the company will go out of business and leave you with an “orphaned” product.

SSL Certificate

SSL (Secure Sockets Layer) is the standard security technology for protecting information that is passed between the web server (site) and your browser.

You have no doubt used SSL thousands of times already; SSL is an industry standard and is used by millions of websites to protect the online transactions with their customers.

Why do I need SSL?

As someone who is planning to create/operate an ecommerce website, you don’t necessarily need to understand all the technical details of SSL; however, understand that SSL makes sure that “bad people” can’t get your private information (social security number, credit card number, password) as it is sent across the web. Why do you need SSL on your site? In short, you need an SSL certificate to protect your visitors’ sensitive information. You need an SSL Certificate to securely pass data between the web browser and web server. If your website is accepting/processing online payments, an SSL is a requirement.

How do I get an SSL Certificate?

After you’ve setup your hosting account, you can contact any number of SSL Service providers, purchase the SSL Certificate, and install it for your website.

Installing your SSL Certificate is a fairly simple process; however, it can vary for different web server applications.
If you have any questions, your webhost very likely had a step-by-step guide for installing an SSL Certificate on your server. If not, contact your hosting provider’s technical support department for further assistance.

By J.T. Burton – An experienced digital Product Manager focused on the creation, execution, and sale of award-winning digital products. For a complete list of WordPress hosting companies and commercial WordPress plugins to extend your WordPress site, visit BestWebPlugins.com.