How the sellXed Plugins Work
The sellXed payment modules are convincing above all due to their easy and efficient integration into your online shop. In the following passage we would like to give you an introduction to how online payments work and which parties are involved.
The entire payment process goes through several stages until the confirmation is finally sent back to the shop and the payment is received. We would like to explain this process to you in more detail, so that you as well as your customers know what happens behind the scenes of a credit card transaction.
Usually five parties are involved in the process of a card transaction:
Payment Service Provider
A Payment Service Provider offers comprehensive support services such as the transmission of credit card and other data and thereby enables online shops to electronically process payment transactions. Further information on the Payment Service Provider can be found here.
The Acquirer concludes a credit card acceptance contract with the merchant and collects the money from the issuer of the card. In order to do so, the Acquirer requires a special license from the corresponding card organisation (e.g. MasterCard, Visa, American Express).
The Issuer is a company that issues a card to the card holder. Generally the card holder applies for his or her credit card directly with his or her bank.
The Contract Partner (Merchant)
Accepts the payment by card of a product or service bought in his or her shop.
The Card holder
Customer, who wants to complete a transaction.
Which contracts do you require?
For a merchant to be able to offer payment via credit card one of the first things will be to decide on a Payment Service Provider (PSP) and an Acquiring Bank. Payment Service Provider contracts control the different options in cashless payment methods like credit cards, PayPal, Sofort, etc through one PSP, who for his part offers accessibility to Aquiring Banks or other Payment Service Providers mentioned above from a single source. As a merchant an important question to ask is which contracts are absolutely necessary in order to be able to accept credit cards in a shop. The following list shows you which ones you need:
- Licensing contract for the use of the payment module
- Contract for the Payment Service Providing
- Credit card acceptance contract with an Acquirer (usually these are brokered by the PSP)
Procedure of a Credit Card Transaction
- The customer chooses a product in the online shop and clicks "Buy".
- As a part of the checkout, the customer is prompted to enter his credit card information on the payment page of the PSP. The sellXed payment modules encrypt the message with a stamp and transmit the data via a secure channel to the PSP.
- The PSP forwards the authorization request via Acquirer further to the Issuer.
- If approved, the amount will be debited from the credit card holder. The confirmation / rejection notification will then be sent back to the PSP.
- The Payment Service Provider adds response codes to the authoritative answer and sends it back to the online shop of the dealer. In the shop of the merchant, either an order will be created or the transaction will be declined - depending on the authorization response of the PSP
- If the order was successful, the merchant will deliver the goods or provide the services for the customer.
- The Issuer sends the corresponding amount for the transaction to the cardnetwork. which then pays them into the merchant's bank. This is called "settlement". This process typically takes two to four business days.
The payment modules play a central role in a credit card payment process as they ensure that the payment haven't been modified in the course of the authorisation and that the PSP's responses are correctly processed. Only by using tested and recommended software the security of online payments can be ensured.
For a more hands on illustration we have put together a screencast of the entire process: http://www.youtube.com/embed/TQrZ8bP0IgU?rel=0vq=hd1080