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Third Party & Direct Processors

An online payment gateway, whether used with a web shopping cart or a virtual terminal, provides a secure connection for credit card acceptance, which may be required by the terms and conditions of your merchant account.

The entire process used by an online gateway is actually very complex, and involves multiple encrypted transactions between banks, credit card processing companies, and anti-fraud tools. Even though the transaction takes less than a second to authorize or decline, the setup process for a gateway will involve several different parties, all of whom will take a chunk of the transaction fee when your card is authorized.

Ecommerce Shopping Carts

Most of the time the checkout process in an online shopping cart is seamless for the customer. A secure checkout page is used to take credit card data, which gets encrypted on its way to your web server, where it then goes through the payment gateway to the card issuing bank, which does its own tests and responds back with an authorization or decline notice.

Batching and Fulfillment

The advent of online gateways made it possible to batch orders for payment entirely online. While credit card terminals can now be batched online or through the terminal itself in most cases, online batching for settlement means that a few clicks of a button determine which authorized transactions have been fulfilled. In the world of ecommerce, it is customary, and generally required, for the merchant to wait to batch out the order until it is actually shipped, or on the dock to go out. Naturally, orders that don't ship right away, because they are custom-made or out-of-stock, can experience fees for failing to batch out promptly, and too much of a delay may cancel the transaction. If this could be a common issue with your orders, talk to your processing company because they may be able to adjust the order window so the authorization does not drop off prior to shipment and fulfillment.