Making the Payments for utility bills or online shopping by credit cards is now a most common trend and method of online financial transaction. Apart of this fact, almost every body is confused when it comes to understand processing method of these financial transactions. Let us try to understand the concepts regarding online credit card processing.

In case of manual shopping by credit card, after the swipe of your credit card, the merchant returns your card and asks for a signature over the merchant’s slip for authorization over the payments validity. Then the details of the payment are sent to the merchant’s banking body which verifies the credit card transaction. After a positive feedback the financial institution behind the credit card transfers the funds to merchant.

The major difference between a manual and online credit card processing is that the credit card swipe-terminal is replaced with a service that online transfers the payment in a safe and secure method particularly known as payment gateway. A few examples of payment gateways are 2checkout, Authorize.net, etc.

Payment gateway works like swipe portal, which on verifying the transaction either accepts, or denies (specifying the reason for deny) the transaction. Other factors which might involve an extra charge over the total transaction can be merchant’s business account, the category of credit card, and several other factors. Mostly the charge is up to two to three percent of entire sum of amount. Overall it gives a safe and secured way to make the payments through credit cards.