The Role of Payment Processing in eCommerce

ecommerce and payments

We’ve shared a series of posts recently to demystify the world of eCommerce, and help get you started in building your online storefront. From the basics of Taking Your Business Online, to various platforms you can use to build your website (such as Wix or Shopify), to Digital Marketing Basics to help you connect with more customers, we hope this information has helped you to build understanding and confidence to take your business to the next level.

We’ve shared many ways that the online storefront mimics your brick-and-mortar business – such as the impact of product placement, and the ease of finding answers to questions or completing purchases. There are, of course, some fundamental differences in the online world.

One such difference is the role of the PSP (payment service provider). While it’s true that a PSP’s role is to process payments quickly and securely, there are some additional considerations for the provider of your online payment processing services.

What is a Payment Service Provider?

A payment service provider (PSP) or payment processor enables merchants to receive payments from a variety of payment methods, such as debit or credit cards, eWallets, bank transfers, and more. A payment processor is a vital component of doing business, whether in-store or online. This third party is responsible for receiving customer payment data, processing it securely, and protecting merchants from fraudulent transactions.

Online integration

Your payment processor will seamlessly integrate into your online store, just as it does in your day-to-day operations in a brick and mortar storefront. Rather than working with a physical point of sale system, however, in this case the payment processor is a seemingly “silent partner” as far as your customers are concerned. The processor receives payments through the gateway, sends the data to the issuing bank for approval, and sends a message back to the site to confirm the order transaction, all within a matter of moments.

Convenience and efficiency are key in the online world from a customer standpoint, but this shouldn’t come at the expense of security for merchants and buyers alike, of course.

payments security

Security is key

In stores where merchants are receiving payments in-hand and looking purchasers in the eye, there is an amount of responsibility on the merchant sales representative to perform checks and balances to protect themselves and card holders from fraud. Asking for identification, comparing signatures, or requiring PIN input are common ways of validating purchases.

In the eCommerce space, merchants place a lot of trust in the payment processor to protect them from fraudulent transactions and chargebacks. A reputable payment processor will have a dedicated fraud team that is responsible for staying ahead of trends amongst fraudsters. The PSP will also have a means of communicating if any red flags arise, and will swiftly blacklist a payment method that they deem fishy.

But that’s not the only layer of security required. When customers make purchases, sensitive data is input and transmitted to the merchant and between banks. A trustworthy and reliable payment processor helps to build trust with their customers by ensuring that this sensitive data is sent securely and kept private, through high levels of encryption.

PCI DSS is an industry standard and legal requirement for those receiving payments and transmitting private information related to those payment transactions. Look for a PSP such as DPO, who carry the highest level of PCI DSS security compliance, to keep your customers – and yourself – safe from data leaks.

Subscribe for payments, tourism and marketing blog updates

* indicates required