What is the payment flow from beginning to end of an ecommerce transaction? This is the credit card processing payment flow for MOST but not all gateways.

1. If ecommerce, the customer places an order. The ecommerce solution defines what data will be passed to the gateway. It uses an API to pass specified data to the gateway.
2. The gateway receives the transaction information and securely passes it to the payment processor.  Each gateway defines what data it will pass to the processor and it may collect more information than it passes. Each processor defines what information it will accept from a gateway.  The API uses the approved data and data format. The gateway must be certified to connect to the processor via a rigorous approval process to ensure security. The gateway transaction file includes yes/no parameters that were predetermined at the account set up level. For example, the “zip code must match or decline the transaction”. The gateway may also kill the transaction before sending to the processor based on merchant risk parameters that were set up.
3. The processor submits to credit card interchange network.
4. The credit card interchange network routes the transaction to the customers credit card issuer.
5. The credit card issuer approves or declines.
6. The credit card interchange network relays the answer back to the processor.
7. The processor records the transaction details and deposits funds in your account per your merchant account terms. It relays the results to the gateway.
8. The gateway records the transaction results and passes it to the ecommerce solution, which then stores on the customer record.  Again, the ecommerce solution defines which data it will accept from the gateway.

At the very beginning I noted the above applies for most but not all gateways. The exception is if the gateway is also a switch. In that case, the switch can bypass steps and go straight to the credit card issuer. This is more rare and none of the most popular gateways can do this.

This is the information sent to a friend for a credit card processing account:
AUTHORIZE.NET VIRTUAL TERMINAL
No cost for set up
$5.00 a month
2.20 % per transaction
or
2.84 % per transaction if security info is missing
.20 per transaction
No Cancellation Fee
1 week to set up

What’s wrong with this offer?
Authorize.net does not provide payment processing. They are a gateway only.

Some Payment processors provide virtual terminals, including the ones I represent. For straight credit card processing (not recurring billing), the authorize.net solution would be an extra layer since you would pay for a gateway, and then for the processor. There is no exception- authorize.net does not and will not process credit cards.

RECOMMENDATION: Pass! Without examining rates, the representation is incomplete at best and I don’t recommend doing business with anyone who doesn’t provide full disclosure until after the fact. All the true details would come out later after the ‘initial paperwork’ is done.

Note: Authorize.net does have a virtual administration, but the processing is not done by them so the contract must be with a different party. I personally have access to the Authorize.net administration as both a reseller and as an account user. As a reseller, I can set up accounts on demand, and set the rates the merchant will pay, adding on some profit to my fixed costs if desired.