Here's what happens behind the scenes when someone buys something with a credit card:
- During checkout, the merchant makes sure the customer's credit limit is enough to make the purchase. This is called authorization.
- 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.
- 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.
- 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.
- 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.