Here’s How Credit Card Payment Processing Works Through Providers Like  


These days, ecommerce businesses contribute greatly to the economy, bringing in billions of dollars in sales each year. It’s also highly competitive as thousands of ecommerce companies battle for the attention and money of the same customers. And because competition is so tough, they need to be able to provide consumers with as much convenience as possible. This includes being able to process their credit card payments.  

Therefore, it’s become absolutely crucial that these businesses have appropriate credit card payment processing for a seamless shopping experience. And it also helps you ensure a bottom line. If you’ve just started an online business and are wondering how credit card payment processing is supposed to work, here’s what you should know.

What is High-Risk Payment Processing?  

High-risk payment processing is the same as regular credit card payment processing with a few changes. The biggest difference is that it’s preferable for merchants who have a high volume of sales or a higher average purchase value. As a seller, the reason you need high-risk payment processing is that your account is at a high risk of returns, fraud, or chargebacks. When the risk is greater, it becomes difficult to find a payment processing service provider that can help you.

How Does eCommerce Credit Card Payment Processing Work  

To process credit card payments, you need to get a merchant account from a processing company, which allows you to take online payments from most credit card networks. For instance, VISA, Mastercard, Discover, and American Express. You can expect to pay certain types of fees, such as setup fees, monthly fees, chargeback fees, application fees, and termination fees, in the event that you cancel.  

The benefit of having a merchant account with your payment processor is to give customers a secure financial network for them to pay for the product. The payment gateway evaluates the validity of customers’ cards, determines which bank they’re associated with, encrypts their information, and authorizes transactions.  

When everything checks out, the payment gateway will approve the transaction, and the funds go from your customer’s credit card to your merchant account.  

Processing credit card payments for ecommerce purchases is complex, which is why service providers such as are gaining traction among businesses. They work by combining the entire process into a single platform. This makes it much easier for the customer and the business owner.  

Here’s how a third-party payment processing service provider can streamline the process: 

They eliminate the need for you to have an individual merchant account for each card network. Instead, all you need is a single merchant account to represent multiple ones.  It eliminates the need for you to set up a payment gateway because the service includes this. 

They give you a virtual terminal and PoS system. As a result, you can track things such as financial records and inventory for tax purposes.

How Do You Calculate Credit Card Processing Fees?  

Now that you know how a third-party credit card processing service works, you should know how the fees are calculated. Although these solutions can simplify the process of accepting payments from customers, it takes a lot to transfer funds with ease. The most important thing is to know your total fees, also known as the effective rate.  

It accounts for everything and includes different fees, as well as the markup you pay the processing service like The fees included are an interchange fee, which is paid to the card-issuing bank, assessment fees, cancellation fees, and potential rate increases.  

As the business, you can get some flexibility in terms of negotiating the fees. Although assessment and interchangeable fees aren’t exactly negotiable, you can ask about fees for voided transactions or when you need to refund a customer.  

How Credit Card Processing Can Enhance Your Business  

Whether you’re a startup looking to enter an industry or an online merchant who wants to enhance their business, your credit card processor is a crucial component of how you operate. After all, not all of them have the same features. You need to carefully check their pricing model because it’ll end up having a major effect on your bottom line.  

Although there are fees involved in hiring a payment processor like, you’ll be able to offset them by providing customers with credit card payment options. Additionally, you need to ensure that the one you choose is completely secure for customers. After all, you want to protect customers’ sensitive credit card information.

Bottom Line

All in all, a credit card payment processor is crucial for an ecommerce business, and you should consider one based on ease of use, affordability, and security. And if your business is at risk of chargebacks or returns, you’ll need a high-risk payment processor to accommodate you.