Payment processing for business: what to know

If you have a company, step one in our financial activity will be opening a business account. After all, you need it for main banking activities, such as sending and receiving funds, ordering debit and credit cards, etc.

But what about step two? Well, if you sell goods and/or services, this step will be getting a merchant account. But before you do, you also need to know the basics of merchant processing and processing systems. Find out all the necessary information about payment processing in this Genome article.

Payment processing as a part of payment systems for business

There are many components that play a part in financial services for merchants. Payment processing is integral for companies to receive payments from customers. Payment processing for companies is a complex of processes and entities that enables merchants to accept payments.

To better understand it, let’s first go through the companies and entities that take part in payment processing and then through the process itself.

The participants

A merchant – is a company that sells its goods and/or services online;
Clients – individuals and businesses that buy things from a merchant;
An issuing bank. It is a bank that issues a debit/credit card to clients;
An acquiring bank, which is a merchant’s bank;
A payment processor. Payment processing companies allow the processing of clients’ transactions;
A payment gateway that receives the card data from clients and sends it to a payment processor. A payment gateway can be a part of a payment processing company or exist as a separate payment gateway provider. You can find out more about payment gateways for websites in this article.

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Payment processing for business: all the steps of the process

Let’s review how processing solutions work with an example:

You are a merchant that sells candles online and use a standard payment system for business;
A client comes to your website, finds some candles that they like, and adds those to the shopping cart;
Then the client goes to the checkout page, where they select the payment method (in this case, a debit card), fill out the payment information and order the goods;
The merchant receives the order and sends the payment information to the payment processor;
The payment gateway receives the data, encrypts it, and directs it to a payment processor;
In turn, the payment processor contacts the card association and the bank that issued the client’s debit card;
The issuing bank receives the transaction request and then approves or declines the transaction based on set parameters as well as whether the client has enough funds to pay for the purchase;
The issuing bank then sends the acquiring bank (merchant’s bank) the information on whether the transaction was successful or not;
The acquiring bank also notifies the merchant about the transaction status. If it is successful, the funds for the purchase will be transferred to the merchant account.

The whole process takes seconds to complete, even though so many parties are involved.

Looking for payment processing* solutions? Genome can help!

If you need to accept payments* from your clients, you can use Genome. Our Electronic Money Institution has all the merchant processing tools* necessary! Apply for Genome’s business wallet in just a few clicks and then start a merchant account*.

We provide host-to-host, hosted payment pages, and mobile SDK solutions*, which are easy to integrate on your website and inside the app. With Genome, you can accept payments* in more than 20 currencies and via a plethora of payment methods.

*Please note that Genome’s merchant services have been temporarily unavailable since September 2024.

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FAQ

How can I accept payments for my online business?

To do so, you need to find a payment gateway provider and\or a financial institution that offers merchant accounts and all the services necessary to accept payments.

How can a small business accept payments?

If a small business has a business account, it needs to apply for a merchant account at its bank. If not, it needs to research the possible options for merchant account opening – some financial providers and payment processing companies offer more beneficial conditions for startups than others.

How are online payments processed?

We described the full process above. But, to sum up, this is how it works: a client orders something on the merchant’s website and fills out the card details. The said details are then sent to the payment gateway via the merchant’s website. The gateway encrypts the data and sends it to the payment processing company. The payment processor then contacts the issuing bank, which needs to notify the merchant if the payment was successful or not.