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How Online Payment Processing Works

Last Updated: Jun 14, 2011 05:34PM EDT

Online payment processing is made possible by a few independent systems working together behind the scenes.  When a website user submits their credit card info into an online payment form, an electronic transaction is securely transmitted through the following entities:


(1) Shopping Cart -- This is the webpage where the user submits his/her credit card information.  In the case of LeagueApps, it is your LeagueApps-powered website.

(2) Payment Gateway -- The shopping cart then connects to a separate system - a payment gateway - in order to securely transmit the credit card transaction info (e.g., card number, payment amount).  A payment gateway acts as a digital go-between that allows a shopping cart to send an electronic transaction to a merchant account, discussed next.

(3) Merchant Account -- A merchant account is a special type of bank account that is setup to accept credit card transactions.  Payments made into a merchant account are then deposited into your regular bank account.


For further reading on online payment processing, see the wikipedia entries for Payment Gateway and Merchant Account.

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