The Basics of the Payment Processing Landscape

Jan 23, 2019 by

The Basics of the Payment Processing Landscape

In 2014, and even a bit in 2015, the landscape of merchant processing looked pretty grim. Not a lot was happening at the consumer level, technology wasn’t very compelling and good deals were hard to find. Businesses didn’t have a lot of options when it came to transferring money online, and most just went with whatever services were offered through their bank or merchant account.

This led to a lot of very expensive fees an inefficient money transfers. Today, things look very different and the future is rather bright for companies who utilize credit card processing. There are several reasons why that is the case.

New Technology

Smartphone adoption rates are higher than they’ve ever been, which means that everyone around you has the potential to carry their wallet in their pocket without ever carrying cash. These devices are secured, sometimes with multiple levels of encryption, and they are easy to use as a means for transferring money.

Merchant accounts are adapting by adding new ways to pay at the terminal. Customers can use digital wallets, mobile devices and more. This goes against the traditional credit card system, but consumers don’t seem to mind. It’s safer to pay with a phone, or to pay online, meaning more of us can buy what we want when we want.


The missing piece of the puzzle isn’t the willing consumer, it’s a business ready to adopt this new technology. It’s been difficult to find a good system that you can link to an existing merchant account, and provide an ecommerce component. Today, that’s no longer the case as there are more options than ever before.

Some of these services are tied to an account, but not all of them. As compatibility improves, it will be easier for consumers to consolidate their wallets.

Right now, the landscape is still fractured but that won’t always be the case. Soon, digital wallets on your mobile device will be the standard. You’ll be able to receive your paycheck over mobile, pay your bills and buy your groceries, all with nothing more than your phone.

Better Security

Of course, the innovation everyone will benefit from (but isn’t the most exciting) is better security. Transactions on these new systems use an anonymous instance, so everything takes place in a vacuum of sorts. This makes it harder for hackers to detect, and nearly impossible for them to extract any meaningful data from.

Read a Related article Below:
Why Do Your Credit Card Terminals Have Chip Readers?


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All About Payment Gateways

Aug 26, 2018 by

All About Payment Gateways

Credit card services involve many moving parts, and one of those moving parts is known as the “payment gateway”. This part of the transaction is the portion that moves the money to and from the payment processor, but it’s not to be confused with the payment processor or merchant account. Confused yet? Then this guide should help.

How a Typical Transaction Works

Typical payment processing begins with the customer swiping his card at the credit card machine. He may also place an order on a website clicking “submit”, or some equivalent button. The user’s browser encrypts the information before it’s sent anywhere, which is made stronger if the site utilizes SSL encryption. The merchant receives that transaction, but can’t touch the money.

The merchant service provider typically doesn’t control the means of getting the transaction to and from a bank. That company forwards the payment to the gateway, which also adds an additional layer of SSL encryption.

The information is forwarded, like a hand off, to the credit card bank. They verify the transaction as authentic and they approve or decline it. They simultaneously issue a response code to the merchant’s processor, indicating whether the transaction was approved or denied. The processor then uses the payment gateway to send that code to the merchant’s bank. This starts the full authorization process, where funds begin to transfer.

At the end of each day, the merchant submits all processed transactions as a “batch”. This batch records their sales for the day, which completes most of the work transferring funds. After that, the banks have to work out the exchange which can take about 24 hours. If everything goes smoothly, the transaction itself will take about 2-3 seconds, while the transfer will take a maximum of 72 hours.

Final Thoughts

A payment gateway is necessary to running a merchant account. Few of these companies manage their own, so the costs of the transfer are a part of the costs a merchant pays at the credit card machine. If you’re considering a merchant account for your new business, be sure choose the interchange plus model for your pricing plan. If you choose a flat rate, all of those costs are lumped into a single transaction fee. With interchange plus models, you get a fair rate based on the type of transaction your process. Ultimately, that can reduce the fees you pay.

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How Bitcoin is Impacting Today’s Currency

Jan 7, 2018 by

How Bitcoin is Impacting Today’s Currency

Article submitted by NYC Generation Tech.

Summary: Cryptocurrencies have become a hot topic recently. Continue reading to see how Bitcoin is impacting currency today.

One of the latest trends that has been getting quite a large amount of buzz recently is ‘cryptocurrency.’ A cryptocurrency is a digital form of currency in which encryption techniques are used to generate more units of the currency. The concept of a currency that is decentralized, and thus not bound to a specific country or region of the world, is not new.

BItcoin, arguably the most famous cryptocurrency, was launched in 2008 but has only recently started to transition from the realm of niche communities to a concept the average consumer has at least heard of. Still, the question of how impactful Bitcoin has been on digital currency still stands. Is this a fad or does it have serious potential to change how we handle currency?

More of an Asset

When Satoshi Nakamoto first came up with the idea for Bitcoin, he intended for it to be used as a peer-to-peer electronic currency that did not require regulations from banks or other large institutions. Over the past year, Bitcoin has jumped from $777 to a high of $17,000 and currently sits just above $11,000. The value of a Bitcoin is currently rising and falling by too much for it to be taken seriously as an actual form of currency. Merchant account companies work to offer reliable methods of handling credit card transactions but there aren’t any quick and affordable methods to handle Bitcoin transactions yet. Rather, Bitcoins have mainly been used for investments, quite similar to how someone would invest in a stock in hopes of its value eventually increasing, ultimately yielding him or her a profit.

Not Widely Accepted Yet

In order for Bitcoin to be treated as a currency, it has to have a value that can be conveniently exchanged for goods or services. As it currently stands, a reasonable payment gateway to handle Bitcoin transactions does not exist. Exchanges can be lengthy and expensive, with transaction fees averaging over $11. This could discourage both stores and consumers from using the currency like they would a US dollar. It would seem impractical to buy a pack of gum or a sandwich, for example, if the transaction costs ended up exceeding the actual costs of the goods.


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Know the Lingo: Basic Terminology for Merchant Accounts

Jul 12, 2016 by

When you’re trying to research something new, like credit card processing, you’re going to need some foundation for the lingo so you understand what is being discussed. There are many terms related to merchant accounts, almost too many to list in a single article, so these terms are some of the most important. After reading this guide, you should have a firm understanding of terminology you can use to help find the best merchant account for your business.

Merchant Bank

The merchant bank is responsible for providing the means to facilitate a transaction, also known as a payment gateway. They may not design that gateway, but they allow customers to utilize it in order to securely send money online or in-store. Aggregators, like PayPal, design their own solutions and allow transaction processing without the “bank” nomenclature.


The processor is the middleman for your transaction, which routes the credit information. When you slide a card through a credit card machine, the processor passes the information to the gateway that sends the data to the merchant bank.

Issuing Bank

The customer’s bank, or the bank issuing funds to cover the costs of the transaction (including the purchase, and associated taxes). These institutions give credit cards to consumers, and usually pay the costs up front while charging customers interest to pay those costs back.


Secure Sockets Layer, a form of encryption that helps anonymize and protect financial data as it is passed from the issuing bank to the merchant bank.


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