Ever since digital payments were introduced in India almost a decade ago, card-based payments, specifically credit cards, have gained popularity. Flexible repayment options, convenience and reward programs are why many high-end consumers prefer to pay with credit cards. However, many businesses, especially smaller ones, are still figuring out how to accept credit card payments. This article throws light on how to accept credit card payments online, what tools businesses must use to ensure seamless payments and how they are beneficial for them in the long run.
Key Takeaways
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Types of Credit Card Transactions
Before we delve into the details, it is important to broadly understand a few different types of credit card payment methods. As digital payment methods gain popularity, banks issuing credit cards are scaling up their business models to accommodate seamless credit card usage. Depending on the type of business and mode of shopping, credit card transactions are differentiated as In-person payments, online payments and other remote methods of payment. Let’s take a look at each type of credit card payment.
In-Person Payments
In-person payments occur when customers physically visit merchants in their shops, the traditional way. Merchants accept credit card payments through Point of Service(PoS) machines, which are programmed to accept credit card payments through EMV (Europay, Mastercard, Visa) which ensure secure, approved transactions for Indian, as well as international cards. Since contactless credit cards are the modern norm, many PoS devices allow the tap-and-pay credit card payment method for the convenience of customers.
Online / Card-Not-Present (CNP)
Online shopping is gradually becoming the norm, particularly now that digital payments are increasingly dominating the market. When making a credit card payment during online shopping, customers are required to input their credit card details and wait for their secure verification code, which is typically an OTP sent exclusively to their number. Once they enter the OTP, verification is complete, and the payment is processed. The flow of operations in the backend will be explained in the next section.
Remote Methods
Remote billing refers to instances which are neither online shopping nor in-person shopping. In circumstances where customers are located remotely, the business sends a payment link which can be used to make credit card payments. Razorpay supports remote credit card payment online through its payment gateway, facilitating fast and secure payments.
If you are a merchant and are unable to figure out how to accept credit card payments online, explore Razorpay’s payment solutions to gain clarity.
How Credit Card Payments Work
For every credit card payment made through any of the transaction methods, a meticulous process occurs in the backend, ensuring that the entire transaction works smoothly, without glitches. Here is a detailed explanation of how credit card payments function.
Initiation
When a customer enters their credit card details and clicks on the ‘Pay Now’ button, a transaction is initiated. In the backend, these details are sent to the customer’s issuing bank for verification. Once verified, it is authorised by the customer’s credit card-issuing bank.
Authorization
Once the details are verified, the issuing bank sends an OTP or a code to the customer’s phone number or registered email address. When the customer enters the code in the authentication page, the authentication is complete. When the bank receives a receipt of validity from the customer in the form of the OTP, it authorizes the transaction.
Approval
In this phase, the bank which has issued the credit card accepts/ declines the transaction, depending on whether the customer has entered accurate information on the payment page.
Settlement
Once it is approved, the issuing bank sends the respective amount to the merchant’s account, without charging additional fees. As a merchant, you now understand how to accept payment through credit card online.
How To Accept Credit Card Payment?
Select Appropriate Banks
Merchants who successfully transact using credit cards have one key factor – the issuing bank. Selecting the right merchant bank matters because they are the ultimate deciding factor for successful credit card transactions. Hence, the very first step towards accepting successful credit card payments is to select banks that offer merchant accounts. Most of the prominent banks in India offer separate merchant accounts to businesses. Make sure that you select one of these banks as your partner bank to accept credit card payments.
Choose A Payment Processor/Gateway
The right payment gateway never delays payments, facilitates easy transactions and is easy to use for merchants and customers alike. Compare pricing, understand its feasibility with the different transaction types (PoS, In-shop, Remote), customer support and supported cards/networks.
Integrate Payment Solutions
For physical stores: Set up PoS terminals or card readers and configure them. Integrate these tools with payment solutions to ensure smooth transactions.
For e-commerce: Integrate a payment gateway into your website or app. Razorpay offers ready-to-use plugins and APIs for popular platforms.
Configure Terminals & Inform Staff
Ensure that hardware and software are well-connected and talking to each other for smoother operations. Ensure they are configured to accept credit card payments. Train staff and related personnel and ensure that your business is well-equipped to accept payments from customers.
Start Accepting Payments
While accepting payments, ensure that you display the brands with whom you have partnered so customers can pay accordingly.
How Razorpay Facilitates Seamless Credit Card Transactions For Merchants
Razorpay’s payment ecosystem is well-equipped to accommodate the latest technological upgrades, making it one of India’s most sought-after payment solutions software. It supports all major Indian and international cards and has a high acceptance rate.
Quick Onboarding and Integration
Enables fast merchant activation and and acceptance of credit card payments.
Plugin & API Integration
Razorpay offers ready integration with major e-commerce platforms and CRM solutions across the world.
Secure & PCI Compliant
Razorpay handles sensitive card data securely using advanced fraud detection and SSL encryption.
Easy-To-Use Dashboard
Razorpay’s user interface is simple, offers easy navigation for both merchants and customers alike.
Conclusion
Credit cards are gaining widespread popularity as digital payments are becoming more and more widely accepted across the world. To ensure that the entire process is conducted securely, without any hassles, it is important to choose the right bank, reliable payment gateways and employ the right software. If implemented correctly, your business will benefit a lot, while harbouring loyalty among your customers. Razorpay has proudly evolved to become one of the most trusted and sought after payment facilitators in India due to its flexibility, security and scalability.
FAQs
What do I need to know if I wish to start accepting credit card payments?
If you are a business owner and you wish to accept credit card payments, you must open a merchant account with your bank, integrate your business with a payment gateway and a suitable website or payment solution provider like Razorpay.
What is a payment gateway? Do I Need one?
A payment gateway acts as a bridge between your payment interface and website. These tools aid secure, fast and seamless transactions. Depending on your business needs, you may configure the payment gateway. While purchasing this service, remember to look for solutions that can be integrated with your e-commerce website.
What fees are associated with accepting credit cards?
Common charges include transaction fees, monthly account fees, setup fees, chargeback costs, and gateway fees. Review terms before choosing a provider to avoid surprises.
