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Credit card processing

Here's what happens behind the scenes when someone buys something with a credit card:

  1. During checkout, the merchant makes sure the customer's credit limit is enough to make the purchase. This is called authorization.
  2. When the items are ready to ship, the merchant asks the credit card company (Visa, Mastercard, etc.) to transfer the funds. This is called capture.
  3. Authorization and capture ensure for the credit card company that the items are actually available. So, if both the customer and items are present at the transaction (say, at a point of sale), then these steps can occur at the same time.
  4. Typically, all of a merchant's credit card transactions are processed and submitted in a batch to the credit card company at the end of a business day.
  5. Within two or three business days, the funds are deposited in the merchant's bank account.

Merchant Accounts and Payment Gateways

For all this to occur, every merchant needs two things:

  • A merchant account, which tells the credit card company who you are and where to deposit your money.
  • A payment gateway, which connects to your shopping software (Populi, in this case) and securely transmits credit card transactions.

You have two options with Populi:

  • Stripe is a complete payment solution, serving as both merchant account and payment gateway. It takes around five minutes to set up a new Stripe account and connect it with Populi. Its pricing is better than just about anything out there—and it has no setup, monthly, or card storage fees. All things considered, we think Stripe is the best option for Populi customers.
  • Authorize.net provides an assortment of payment services.
    • Their gateway/merchant account solution is comparable to Stripe (both features and price), but includes some extra fees.
    • Their payment gateway works with almost every merchant account out there. If you wish to keep your existing merchant account (or open a new one) Authorize.net's payment gateway will (probably) let you do that.
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6 Comments

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  • 0
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    Jason Haché

    Are there limits to which cards can be processed by Populi Bookstore or Online Payments? For instance, American Express, Discover, etc. Also, are there any limits on things like VISA check/debit cards?

  • 0
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    Brendan O'Donnell

    Jason,

    Since Populi works with Chase and Authorize.net, both of which have different settings as to which credit cards are accepted, we don't have a notice up concerning which cards are accepted and which ones aren't. Basically, Populi passes the information entered on the payment screen along to the processor, and the processor figures out who the card issuer is based on the mysterious credit-card juju embedded in that 16-digit number. If the card is from a company the processor deals with, then it works; if it's from a company the processor doesn't deal with, then it produces an error (which Populi then displays to the user).

    You can probably check (or even manage) which cards are accepted by logging in to your Chase or Authorize.net terminal.

    As for check/debit cards, Visa is Visa is Visa, so they should work; again, refer to your processor's terminal and see if there's a switch you need to flip to enable that.

    thanks!

    -brendan

  • 0
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    David Stauffer

    Our bookstore is set up as a separate entity from the rest of the college.  Can Popluli handle 2 separate merchant accounts, or would it all go into one pot?  (which we'd have to separate with accounts and handle on the accounting end of things).

  • 0
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    Brendan O'Donnell

    David,

    Yup, if your Bookstore is a separate entity, we can enter separate credentials for two different merchant accounts. You will need to also keep things distinct on the Populi Accounting end, but we can make sure that your money from the respective ventures flows into the correct, separate, real-world bank accounts.

    thanks,

    -brendan

  • 0
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    Jared Palmer

    I've been looking at the two options for credit card processing - Chase Paymentech being the less expensive of the two options.  Authorize.net charges ludicrous fees.  Alaska Bible College has been using TransFirst (formerly US Merchant Services) for just over two years.  Our account manager has taught me how to read and interpret not only our merchant services statement, but also the quoted fess from other merchant service providers seeking our business.  I'm VERY happy with TransFirst, and especially with Jodie Napolatin, our account manager.  After switching from Wells Fargo, our discount rate went from 3.25% to 2.3%.  We pay on average about 2.5% including the statement fee and transaction fees.  I've actually had a few months that have been as low as 2.09% effective rate (processing charges divided by net sales). 

    I've been talking with our account manager at TransFirst about the possibility of connecting with Populi and they have responded with a proposal for merchant service discount rates and pricing for use of their gateway.  It's much cheaper than Chase's fees.  Would it be possible for Populi to speak with our representative?  I can connect you with her.

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    Brendan O'Donnell

    Jared,

    Would you mind submitting this as a support request? That way I can make sure the right people can see it.

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