In the simplest terms, payment processing is the act of completing financial transactions between two or more parties. The transaction can be as small as a purchase from a vending machine or as large as a multi-million dollar business deal. The payment processing industry is worth over $1.5 trillion and is constantly growing.
In the current digital age, businesses must have a payment processing solution in order to operate. Payment processing allows businesses to accept various types of payments from customers, such as credit cards, debit cards, and ACH payments. There are a variety of payment processors on the market, and businesses must choose the one that best fits their needs.
What are the Different Types of Payment Processing?
a) Credit Card Processing
Credit card processing is the most common type of payment processing. Businesses use credit card processing to accept payments from credit card customers. Credit card processing is a two-step process: first, the business must obtain a merchant account from a bank or other financial institution; second, the business must integrate its accounting software with its merchant account.
b) Debit Card Processing
Debit card processing is used when a customer purchases using their debit card. This can be done either online or in person. Once the purchase is made, the method of payment (debit card) goes through a process of verification and approval by a financial institution.
c) ACH Payments
ACH payments are payments that are made through the Automated Clearing House network. ACH payments are used to pay bills, make online purchases, and transfer money between bank accounts. ACH payments are made through a third-party processing company, and businesses must have an ACH account in order to accept ACH payments.
d) Payment Gateways
Payment gateways are companies that provide payment processing services for businesses. Payment gateways allow businesses to accept payments from customers through a variety of methods, such as credit cards, debit cards, and ACH payments. Payment gateways also provide fraud protection and payment processing for businesses that sell products or services online.
What are the Different Types of Payment Processors?
There are a variety of payment processors on the market, and businesses must choose the one that best fits their needs. Some of the most common payment processors include:
1. Square
Square is a payment processing company that allows businesses to accept payments from customers through a variety of methods, such as credit cards, debit cards, and ACH payments. Square also provides a point-of-sale (POS) system that allows businesses to accept payments from customers in-store.
2. PayPal
PayPal is a payment processing company that allows businesses to accept payments from customers through a variety of methods, such as credit cards, debit cards, and ACH payments. PayPal also provides a payment gateway allowing businesses to accept customers’ payments online.
3. Stripe
Stripe is a payment processing company that allows ventures to accept payments from customers through a variety of methods, such as credit cards, debit cards, and ACH payments. Stripe also provides a payment gateway allowing businesses to accept customers’ payments online.
Insight: EMBARK uses Stripe for our own payment processing, invoicing, subscription billing and customer portal needs.
4. Braintree
Braintree is a payment processing company that allows businesses to accept payments from customers through a variety of methods, such as credit cards and debit cards.
Conclusion
Payment processing is vital for any business that sells products or services online. Without a reliable payment processor, it would be difficult to accept payments from customers and complete transactions.
There are a variety of payment processors available, so it is important to do your research to find one that best suits your needs. There are also a number of ways to integrate a payment processor into your website or online store, so you can choose the method that works best for you.
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