Overview and Frequently Asked Questions
Real-time credit card processing is often misunderstood. Many merchants are not aware of the various companies and fees involved and this document has been created to explain the process and address the most frequently asked questions (FAQ).
This ensures that your site visitors have an intuitive experience and are not directed to the payment processors site to complete the transaction. This also provides greatly enhanced reliability as the component returns the success or failure of the transaction to your ecommerce implementation directly without having to depend on a post back communication from the payment processor.
Keeping your customers at your site also provides continuity and ensures that transactions are not abandoned due to questions over payment processing.
View the 50+ currently supported gateways / processors..netCHARGE provides a common interface eliminating processor / gateway lock in and native "direct connection" to various processors provides major cost savings.
Credit Card Processor: Whether merchants know it or not, all are working with a processor. The processor provides the merchant account which enables you to accept credit card payments and interfaces with your bank account for depositing funds.
Credit Card Gateway: The gateway provides a web based interface to the credit card processor. Gateways provide two main services 1) enable your web site to communicate over the internet to process credit cards in real-time 2) provide management and reporting interface for any transactions run through the gateway.
Merchant Account: A merchant account is provided by the processor and enables you to charge credit cards and acquire funds in your companies name.
Bank Account: Your bank account will be the final destination for funds charged to your clients credit cards. The processor will typically interface your merchant account with your bank account to deposit funds to your account on a periodic basis.
Fees: When setting up the required accounts you will be faced with a number of fees including but not limited to the following:
- Merchant account setup fee: This is normally a one time fee for setting up your account with your processor.
- Merchant account discount rate: This is the discount rate, or percentage the processor will take from any transactions processed through your merchant account. For example a 2% discount rate means that your processor will keep 2% of the dollar volume processed through your account.
- Merchant account per transaction fee: This is a fee for each transaction for example $0.10 would mean for each charge you made you would pay $0.10 in addition to applicable discount rate for the transaction.
- Gateway account setup fee: This is a setup fee which a gateway may charge for setup.
- Gateway account per transaction fee: This is a fee for each transaction for example $0.10 would mean for each charge you made you would pay $0.10 in addition to applicable discount rate for your account. Typically this transaction fee is independent of any similar fees the processor may charge.
- Monthly gateway fees: Gateways typically charge a fee on a monthly basis for providing gateway service. Gateway service includes online reporting and an interface to your web site to enable it to process credit cards in real-time.
- Minimum discount / transaction charges: Some gateways / processors charge a minimum fee for your account so even if no charges are run, a set amount must be paid each month.
Note:.netCHARGE does not provide or charge for any services. Any service charges or fees would be directly from your gateway / processor / bank. Please contact any supported gateway or processor for information on their fee structure.
Credit Card Types: It depends on your processor and gateway which cards you will be able to accept. Most gateways support all major cards which include Visa, MasterCard, American Express (AMEX), Discover / Novus, JCB, and Diners Club. Note that the discount rate varies based on different credit card types.
ECheck payments: In addition to credit cards, many gateways and processors now support echecks or electronic checks. This allows for those without credit cards to process transactions on your web site however unlike credit cards, they are not charged in real-time.
Anti-Fraud Gateway Add-ons: Many gateways enhance their offerings with anti fraud or fraud check / screen systems. Normally for an additional fee, and with some specific data input requirements, they implement systems to catch common fraudulent transactions. This could be as simple as comparing provided address information to more advanced techniques such as examining location information based on network address.
SSL Certificate: An SSL certificate allows web browsers to connect to your web site securely. Any information transmitted to or from your web site to the clients web browser will be encrypted. When working with .netCHARGE it should be considered a business requirement to have an SSL certificate for your site. While .netCHARGE requires nothing additional to secure the communication between your server and the remote gateway or processor, the SSL certificate is required to secure the passing of sensitive credit card information from your clients web browsers to your web server.
Credit Card process when working with a gateway and processor:
Customer > Web Site > Gateway > Processor > Bank Account
Credit card process when working with a processor directly:
Customer > Web Site > Processor > Bank Account
What is the advantage of working directly with a processor?
The main advantage is cost. When you work directly with a processor you do not need to pay any monthly gateway fees or gateway transaction fees. In addition, you are working with only 1 company which simplifies communication and problem resolution. If there is a problem, you have only one company to deal with.
If you can work with a processor directly why use a gateway at all?
Many merchants will choose to work directly with a processor to cut out the middle man however gateways can still add value to processors. Gateways provide a web interface to review transactions, process refunds, voids and even charge single transactions. They also can handle storing payment details so you don’t need to store them on your site. In addition, some offer add-ons such as antifraud systems (typically for an additional charge). When you work directly with a processor you are responsible for storing your payment details and any information required to make adjustments to the transactions.
NOTE: when you work with a gateway you are still working with your processor, gateways as their name imply provide a gateway to processors so if you have an account with authorize.net (a popular gateway) you will also have an account with a processor such as nova. You could choose to work directly with nova and save any associated authorize.net fees but by doing so would give up the web interface, management and anti-fraud features provided by the gateway.
.netCHARGE provides a device driver like interface to credit card gateways and processors. This means using a single interface provided by .netCHARGE you can interface with any supported gateway or processor. Changing from one to another can be as simple as changing the processor and login details – all the rest of your code can work without further modification. The result is peace of mind that your ecommerce implementation will have the flexibility to grow and work with any company required to meet your specific needs. As some companies are bought out, go out of business or have service suffer you can be confident you will not have to invest in redevelopment of your payment processing pipeline.
.netCHARGE does not require that users leave your site:
Most gateways provide 2 methods of integration a simple integration method which requires you to redirect your client to the gateways web site where your customer would enter their payment information and an advanced integration method which requires a secure connection be established in the background to communicate with the gateway.
Redirecting users to another site is only suitable for the smallest of online ecommerce implementations and is an inherently poor design choice. Since http is a stateless and disconnected environment your site does not know when an user has been redirected to the payment gateways site, it does not know if the transaction is abandoned or what stage it is at. If there is any problem between the gateway and the customer you would not know about it. In addition, it depends on a post back notification system to communicate back to your site to inform of the success of a transaction. More importantly it is concerning and can appear very unprofessional to be redirected to another web site when you are just about to make payment. The customer must decide to entrust another company with their payment details and become familiar with the look, feel and interface provided by the payment company which will differ from your own web site.
So with all these drawbacks why do some merchants use such systems:
1) ease of integration, without a solution like .netCHARGE advanced integration can be technically difficult and costly.
2) direct integration requires your site have access to an SSL certificate to securely obtain payment details from your clients, some smaller sites do not have an SSL certificate and instead choose to use their payment gateways.
.netCHARGE uses advanced integration exclusively so that users remain at your web site and are provided with the most intuitive shopping experience possible. View a complete list of support gateways and processors.