The customer purchase
A customer arrives at your checkout page, shopping cart filled with merchandise (or services or software), ready to make a purchase. They choose a payment method and enter any required information associated with it.
For cross-border payments: To make cross-border eCommerce a success, this step requires some extra attention. The checkout page should always be presented in the language of the shopper. Not only does this make the customer feel more comfortable navigating the page, but it also feels more like a local shopping experience, making it more likely that they’ll see the process through. (Seventy-five percent of shoppers prefer not to make a purchase decision unless the site is presented in their native language!) A payment gateway with an emphasis on cross-border transactions will detect the shopper’s URL and serve up the appropriate screen.
Routing and processing
In this phase, the customer’s credit card information is captured and encrypted by the payment gateway. The gateway then sends an authorization request along with the transaction information to an acquiring bank the bank or financial institution that processes credit or debit card payments on behalf of the merchant. The acquiring bank then sends the request to the issuing bank the shopper’s bank to request approval to process the transaction.
For cross-border payments: To conduct cross-border eCommerce transactions more effectively, a payment solutions provider should be partners with numerous acquiring banks around the globe. (Some payment providers only have one acquiring bank partner, so it’s important to check!) Why? A one-bank partnership sets up global payments for failure. If the acquiring bank is located in the U.S. and the shopper’s bank is in another country, that transaction has a much higher probability of being flagged for
In the approval phase, the issuing bank either approves or denies the request. That decision might seem like a no-brainer either funds are available or they’re not but it’s actually based on a few different factors.
•Funds: Are the funds available to cover the amount of the transaction?
•Transaction value: Lower value transactions have a better chance of being approved. If you have higher ticket items you might consider splitting the cost into monthly or quarterly payments to increase the chances of approval.
•Currency mismatch: If the currency request doesn’t match the local currency of the issuing bank, the transaction is more likely to be declined.
For cross-border payments: For cross-border payment processing, the approval step goes more smoothly when transactions are routed to the banks most likely to approve them banks that are a good match geographically and that fit the currency and card type of the transaction.
Shopper results and confirmation
Once the issuing bank has made a decision, it informs the authorizing bank, that then informs the customer via the checkout page as well as you, the merchant. Then you can head on over and start the next phase…
Settlement and payout
In this stage, you, the merchant, receive the money owed to you for all of those global transactions. For each approved transaction, the issuing bank sends the appropriate funds to the acquiring bank, which then passes them on to you, sometimes via a payment solutions provider like BlueSnap. You usually have the opportunity to determine how frequently you’ll get paid either daily, weekly, or monthly. Alternatively, some providers offer you the option to receive a consolidated payment, which means you’ll receive all funds owed to you—from all observed
banks and all payment types in one lump sum deposit.
Similar to balancing your own personal checkbook, reconciliation is how you keep track of what you’re owed and what you’ve been paid. You may get multiple reconciliation reports, one from each bank you work with; or, your payment provider may offer the option for a single consolidated report, which includes every transaction from every bank, currency, and payment type.