It is obvious there are benefits for merchants who can accept card payments. Whether customers choose to pay with their credit card, debit card, smart card or store-value card, they expect businesses to be able to accept any payment choice they make. Likewise, merchants are introducing various payment alternatives to their customers such as loyalty card-based programs to improve customer satisfaction, enhance convenience, increase sales, reduce costs and gain a competitive edge.
In real-time processing – which is often called a ‘card-not present’ transaction – the credit card is automatically processed when the customer submits an order. Once the credit card is verified and approved (authorized), the customer receives immediate notification that the order is accepted and the funds are transferred from the customer’s bank account to the merchant’s account.
For instance, a customer visits an online store, submits an order and then provides his or her credit card number to pay for the purchase. The purchase is authorized and the product is delivered. The entire process is supported through software on the merchant’s storefront or shopping cart solution.
In contrast, manual (deferred or batch) processing means the order is received with the credit card number in person, through a phone call, fax, or online form, and given to the merchant who then processes the order manually, either by using a physical point-of-sale (POS) terminal to swipe the card or keying it in using a virtual software-based terminal.
We’ve all seen the POS terminal at our local grocery store or retail outlet. These terminals work with phone lines, but can also be operated using wireless technologies. A virtual software-based terminal is installed on a PC with a modem and available through any web browser. Credit card information is added to an online form and then submitted. The information is either stored on the merchant’s server or on the server of a service provider, and securely protected using SSL or other security programs.