By now, you have probably heard the term ‘payment processor’ and learned that there are many different options for payment processors in Canada. You might have seen advertisements or noticed a different name on every debit terminal, but still wondered what it is exactly that a payment processor does.
It is not quite enough to say that a payment processor takes care of the behind the scenes every time that a payment is made. In order to clarify the importance of a payment processor, this article will outline the central responsibilities and role that payment processors play in your business.
What is a Payment Processor?
A payment processor, such as Moneris, is responsible for authorizing and processing debit and credit card transactions. Every new business owner must choose a payment processor to handle the non-cash transactions that take place at their business. Payment processors are responsible for making sure that every transaction that happens between your customers and your business, and everyone in between, is safe and secure.
How Does the Payment Process Work?
The process begins whenever a customer at your business uses their preferred method of payment such as a debit or credit card. Their card information transports through the payment gateway to the payment processor connected to your business. Your payment processor then sends the customer’s information to their own bank to confirm there are enough funds within their account to fulfill the payment. If there are enough funds in the account, the bank informs the payment processor that the transaction is successful. From here, the payment processor transports this information back to your business to complete the transaction. At this same time, the payment processor also sends data to the bank your business is set up with to share that the sale is successful and informs your bank to credit your account accordingly. This entire process takes place within a matter of seconds!
Why are Payment Processors Important?
In such a complicated and delicate procedure, payment processors are responsible for securely handling your funds from start to finish. It is the responsibility of a payment processor to safely withdraw funds from a customer’s account and accurately deposit them into yours. A proven and reliable payment processor can help to protect both your business and your customers from instances of fraud and hacking. Whether the transactions takes place in your store or online, the importance of a secure and accurate transfer of funds is all the same.
To learn more about Moneris and payment processors, check out our other articles on payment processors, The Benefits of Working with a Bank-Backed Payment Processor and 3 Things You Should Consider When Choosing a Payment Processor.
The information in this article is provided solely for informational purposes and is not intended to be legal, business or other professional advice or an endorsement of any of the websites or services listed.