WhatDoMerchantsNeedtoBeSuccessfulOnline?
Understandingalloftheworkingpartsinvolvedinyourmerchantcustomers’successonline
DomainRegistrar
Web/AppDeveloper
WebHos@ng
ShoppingCart
Accep@ngPayments
TheCommonMerchantStruggle:
Piecingtogetheralloftheworkingpartstogettheirecommercestoreupandrunning
ThisisJoetheMerchant
Hewantstosellbluewidgetsonline
Todothis,heknowshewillneedto:
Registeradomainfor
hisecommercewebsite
Findagoodwebdeveloper
andevenaJerallofthat,thereis
s@llonemissingpieceJoeneeds….
Accep:ngpayments
Decideonahos@ngcompany
Selectashoppingcartprovider
2
GreatQues@onJoe.
WhatDoMerchantsNeedtoAcceptPayments?
• 
• 
• 
MerchantAccount
Amerchantaccount,alsoknownasaMID
(shortforMerchantID),isatypeofbank
accountthatenablesmerchantstoaccept
andprocesspaymentsthroughdebit&credit
cardtransac@onsandconnectsthemerchant
withtheprocessor.
Merchantscanobtainamerchantaccount
throughaMerchantServiceProvider.
Merchantaccountsareanecessityformany
businesses,andareessen@alformerchants
withecommercebusinesses.
PaymentProcessor
Amerchantaccountand
• 
paymentgatewayaccountboth
connecttotheprocessor&both
accountsareessen@alinorder
formerchantstoaccept
payments.
• 
• 
PaymentGatewayAccount
Ifamerchantwantstogetpaid,theyneeda
paymentgatewayaccount.
Apaymentgatewayaccountconnectstothe
processor&securelytransfersinforma@on
betweenthemerchant’swebsiteandtheir
merchantaccount.
Apaymentgatewayiswhatauthorizescredit
cardpaymentsandistheequivalentofa
physicalpoint-of-saleterminallocatedin
mostretailoutlets.
3
Let’sWalkThroughtheStepsWithJoe
NowthatJoeknowswhatheneeds,heisonlyafewstepsawayfromaccep@ngpaymentsonhisecommercestore
NowAccep@ngPayments!
• 
• 
• 
Joe’sMerchantAccount
Joeappliesforamerchantaccountthrough
oneofthemanyMerchantServiceProviders.
TheMerchantServiceProviderhasalistof
requirementsgiventothembyitsacquiring
bank(seeslide5fordefini@on).
+
• 
• 
Joe’sPaymentGatewayAccount
Joeneedsapaymentgatewayaccountsohe
=
canconnecthisMIDtohiswebsite.
JoeopensagatewayaccountwithanNMI
Affiliate(thiscouldbeyou!)whichallows
himtoinputhisMID.
Joe’sapplica@onsa@sfiesalltherequirements
andheisgrantedaMID!
4
HowDoesCreditCardProcessingWork?
Understandingalloftheworkingpartsinvolvedinprocessingacreditcardtransac@on
Cardholder
Merchant
PaymentGateway
PaymentProcessor
IssuingBank
CreditCardNetwork
AcquiringBank
KeyPlayersinProcessingaCreditCardTransac@on
Cardholder
Acardholderissomeone
whohasobtainedacredit
ordebitcardfromacard
issuingbank.Theyarethe
onewhobeginsthecredit
ordebitcardtransac@on
byusingtheircardto
makeapaymenttoa
merchantfortheirgoods
orservices.
ThisisSuzi
Merchant
Amerchantissomeonewho
wantstoacceptcreditand
debitcardpaymentsfromtheir
Lookit’sJoe!
customers(cardholders)forthe
goodsorservicestheysell.They
mustobtainamerchant
accountandsetupapayment
gatewayaccountbeforethey
canstartaccep@ngpayments
andgetpaid.
Joe’sPayment
GatewayAccount
CreditCard
Network
Thecreditcardnetwork
(CardholderBank)
Theissuingbankissues
creditcardstoconsumers.
Theyareresponsiblefor
payingtheacquiringbank
forthepurchasestheir
cardholdersmake.
Suzi’sBank
helpstoconnectthe
issuingandacquiring
banksbyrou@ngthe
appropriatetransac@on
informa@onbetween
thetwobanks.
PaymentProcessor
Thepaymentprocessorworkstoactuallyprocess
thecreditcardtransac@onfromstarttofinish.It
PaymentGateway
Apaymentgatewayauthorizes
creditcardpaymentsandis
whatsecurelytransfers
paymentinforma@onbetween
themerchant’swebsiteand
theirmerchantaccount.
IssuingBank
doesthisbyconnec@ngthemerchantaccount
withtheNMIGatewaysoitcanreceivethe
transac@ondetailsanditalsoconnectstheNMI
GatewaytotheCreditCardNetworkfor
authoriza@onfromtheissuingbank.
Joe’sProcessor
AcquiringBank
(MerchantBank)
Theacquiringbankisalsoreferredtoas
themerchantbankbecausetheycreate
andmaintainmerchantaccountsthat
allowamerchant’sbusinesstoaccept
creditanddebitcards.
Joe’sBank
6
CreditCardTransac@onFlow
2.Suzi’sTransac@onDetailsareSenttoNMI
TheNMIPaymentGatewayreferencesJoe’sMIDand
1.SuzitheCardholderPurchasesaBlueWidget
Suzihasbeensearchingfortheperfectbluewidgetand
aJerfindingJoe’sBlueWidget’secommercesiteshe
decidestobuyone.Sosheentersinherpaymentinfo
andsubmitsthetransac@on.
usingasecureconnec@ontothepaymentprocessor,
routesthetransac@ondetailsontothem.
Joe’sPaymentGatewayAccount
withanNMIAffiliate
Joe’sPaymentProcessor
Joe’sMerchantAccount
7
3.Joe’sPaymentProcessorReceivestheTransac@onDetails
AJerJoe’spaymentprocessorreceivesthem,theysendtherequestontothe
CreditCardNetworkwhoiden@fiestheissuingbankforthepaymentcardand
sendstherequestontothem.
Joe’sPaymentProcessor
Step3
Step3
Step4
Step4
CreditCardNetwork
IssuingBank(Suzi’sBank)
4.Suzi’sIssuingBankApprovesorDeclinesTransac@on
AJertheissuingbankchecksSuzi’saccount,theyeitherapproveordeclinethe
transac@onandthentheresultsbacktotheCreditCardNetworkwhosendsit
backtoJoe’spaymentprocessor.
8
5.Joe’sPaymentProcessorRelaystheResultsbacktoNMI
AJerJoe’sPaymentProcessorreceivestheresults,theyrelaythembacktotheNMIGateway
whereNMIstorestheresultsandthensendsthembacktothewebsitewhereSuzi&Joeseethe
approvalordecline.
Joe’sPaymentProcessor
Joe’sPaymentGatewayAccount
withanNMIAffiliate
7.JoeGetsPaid
Theissuingbank(Suzi’sbank)releasesthe
fundstotheacquiringbank(Joe’sbank).
AJertheseglementperiodJoe’sbank
releasestofundstohisaccountwherehe
canaccessthemoney.
Suzi’sBank
Joe’sBank
6.Suzi’sTransac@onwasApproved!
NowthatSuzi’stransac@onhasbeenapproved,
JoecannowsendoutthebluewidgettoSuzi.
9