WhatDoMerchantsNeedtoBeSuccessfulOnline?Understandingalloftheworkingpartsinvolvedinyourmerchantcustomers’successonline

DomainRegistrar

Web/AppDeveloper

WebHos@ng

ShoppingCart

Accep@ngPayments

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TheCommonMerchantStruggle:

ThisisJoetheMerchantHewantstosellbluewidgetsonline

Findagoodwebdeveloper

Registeradomainforhisecommercewebsite

Decideonahos@ngcompany

Selectashoppingcartprovider

Piecingtogetheralloftheworkingpartstogettheirecommercestoreupandrunning

Todothis,heknowshewillneedto:

andevenaJerallofthat,thereiss@llonemissingpieceJoeneeds….

Accep:ngpayments

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GreatQues@onJoe.WhatDoMerchantsNeedtoAcceptPayments?

MerchantAccount•  Amerchantaccount,alsoknownasaMID

(shortforMerchantID),isatypeofbankaccountthatenablesmerchantstoacceptandprocesspaymentsthroughdebit&creditcardtransac@onsandconnectsthemerchantwiththeprocessor.

•  MerchantscanobtainamerchantaccountthroughaMerchantServiceProvider.

•  Merchantaccountsareanecessityformanybusinesses,andareessen@alformerchantswithecommercebusinesses.

PaymentGatewayAccount•  Ifamerchantwantstogetpaid,theyneeda

paymentgatewayaccount.•  Apaymentgatewayaccountconnectstothe

processor&securelytransfersinforma@onbetweenthemerchant’swebsiteandtheirmerchantaccount.

•  Apaymentgatewayiswhatauthorizescreditcardpaymentsandistheequivalentofaphysicalpoint-of-saleterminallocatedinmostretailoutlets.

PaymentProcessorAmerchantaccountand

paymentgatewayaccountbothconnecttotheprocessor&bothaccountsareessen@alinorder

formerchantstoacceptpayments.

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Let’sWalkThroughtheStepsWithJoe

Joe’sMerchantAccount•  Joeappliesforamerchantaccountthrough

oneofthemanyMerchantServiceProviders.•  TheMerchantServiceProviderhasalistof

requirementsgiventothembyitsacquiringbank(seeslide5fordefini@on).

•  Joe’sapplica@onsa@sfiesalltherequirementsandheisgrantedaMID!

Joe’sPaymentGatewayAccount•  Joeneedsapaymentgatewayaccountsohe

canconnecthisMIDtohiswebsite.•  JoeopensagatewayaccountwithanNMI

Affiliate(thiscouldbeyou!)whichallowshimtoinputhisMID.

+ =

NowAccep@ngPayments!

NowthatJoeknowswhatheneeds,heisonlyafewstepsawayfromaccep@ngpaymentsonhisecommercestore

HowDoesCreditCardProcessingWork?Understandingalloftheworkingpartsinvolvedinprocessingacreditcardtransac@on

Cardholder

Merchant

AcquiringBank

IssuingBank

PaymentGateway

PaymentProcessor

CreditCardNetwork

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KeyPlayersinProcessingaCreditCardTransac@on

AcquiringBank(MerchantBank)

PaymentProcessor

PaymentGateway

CardholderAcardholderissomeonewhohasobtainedacreditordebitcardfromacardissuingbank.Theyaretheonewhobeginsthecreditordebitcardtransac@onbyusingtheircardtomakeapaymenttoamerchantfortheirgoodsorservices.

Merchant

Amerchantissomeonewhowantstoacceptcreditanddebitcardpaymentsfromtheircustomers(cardholders)forthegoodsorservicestheysell.Theymustobtainamerchantaccountandsetupapaymentgatewayaccountbeforetheycanstartaccep@ngpaymentsandgetpaid.

Theacquiringbankisalsoreferredtoasthemerchantbankbecausetheycreateandmaintainmerchantaccountsthatallowamerchant’sbusinesstoacceptcreditanddebitcards.

IssuingBank(CardholderBank)

Theissuingbankissuescreditcardstoconsumers.Theyareresponsibleforpayingtheacquiringbankforthepurchasestheircardholdersmake.

Thepaymentprocessorworkstoactuallyprocessthecreditcardtransac@onfromstarttofinish.Itdoesthisbyconnec@ngthemerchantaccountwiththeNMIGatewaysoitcanreceivethetransac@ondetailsanditalsoconnectstheNMIGatewaytotheCreditCardNetworkforauthoriza@onfromtheissuingbank.

Apaymentgatewayauthorizescreditcardpaymentsandiswhatsecurelytransferspaymentinforma@onbetweenthemerchant’swebsiteandtheirmerchantaccount.

Lookit’sJoe!

ThisisSuzi

Joe’sBank

Suzi’sBank

Joe’sProcessor

Joe’sPaymentGatewayAccount

CreditCardNetworkThecreditcardnetworkhelpstoconnecttheissuingandacquiringbanksbyrou@ngtheappropriatetransac@oninforma@onbetweenthetwobanks.

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CreditCardTransac@onFlow

1.SuzitheCardholderPurchasesaBlueWidgetSuzihasbeensearchingfortheperfectbluewidgetand

aJerfindingJoe’sBlueWidget’secommercesiteshedecidestobuyone.Sosheentersinherpaymentinfoandsubmitsthetransac@on.

2.Suzi’sTransac@onDetailsareSenttoNMITheNMIPaymentGatewayreferencesJoe’sMIDand

usingasecureconnec@ontothepaymentprocessor,routesthetransac@ondetailsontothem.

Joe’sMerchantAccount

Joe’sPaymentProcessor

Joe’sPaymentGatewayAccountwithanNMIAffiliate

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3.Joe’sPaymentProcessorReceivestheTransac@onDetailsAJerJoe’spaymentprocessorreceivesthem,theysendtherequestontothe

CreditCardNetworkwhoiden@fiestheissuingbankforthepaymentcardandsendstherequestontothem.

Joe’sPaymentProcessor

CreditCardNetwork

IssuingBank(Suzi’sBank)

4.Suzi’sIssuingBankApprovesorDeclinesTransac@onAJertheissuingbankchecksSuzi’saccount,theyeitherapproveordeclinethetransac@onandthentheresultsbacktotheCreditCardNetworkwhosendsitbacktoJoe’spaymentprocessor.

Step3

Step3

Step4

Step4

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5.Joe’sPaymentProcessorRelaystheResultsbacktoNMIAJerJoe’sPaymentProcessorreceivestheresults,theyrelaythembacktotheNMIGatewaywhereNMIstorestheresultsandthensendsthembacktothewebsitewhereSuzi&Joeseetheapprovalordecline.

Joe’sPaymentProcessor

Joe’sPaymentGatewayAccountwithanNMIAffiliate

6.Suzi’sTransac@onwasApproved!NowthatSuzi’stransac@onhasbeenapproved,

JoecannowsendoutthebluewidgettoSuzi.

7.JoeGetsPaidTheissuingbank(Suzi’sbank)releasesthe

fundstotheacquiringbank(Joe’sbank).AJertheseglementperiodJoe’sbankreleasestofundstohisaccountwherehecanaccessthemoney.

Joe’sBank

Suzi’sBank