Interactive Order Processing

When providing our site with an order processing system, we have two basic ways to go. The option number one is to sign up for an IMA – internet merchant account and combine it with a PSP – payment service provider. Bank providing IMA will check the available funds, authorize transactions and exchange the funds between creditor bank and your account. With this option, you will have to meet strict legal criteria with your web’s security in order to comply with bank’s policies. The PSP will ensure a safe transfer of your customers’ credit card information. Payment service providers screen for frauds and they are often referred to as Payment Gateways.



The other option is that instead of IMA and PSP, you use services of PPC – payment-processing companies. They are easy to set up, but your customer will be sent to PPC’s website in order to make the payment. That means customer gets interrupted and might start having second thoughts on the purchase. Moreover, the payment settlement periods can be up to 60 days. However, PayPal and Google Checkout usually transfer the payment within days.

Now let’s lose a few words on how the transaction actually happens. Obviously, customer has to first submit the credit card info to the PPC. The PPC then transfers this information to a merchant bank (your bank). The merchant bank then passes the information to the credit card network (such as VISA). The CCN then submits the information to the creditor bank (customer’s bank). This issuing bank then approves or declines this command according to the creditor’s available funds and sends a message about whether the transaction took place or not. This message takes an inverse route and ends up being shown to the customer and you. Then the merchant executes the exchange and the issuing bank sends an appropriate amount of money to the CCN, which subsequently transfers it to your bank account.

I think using services of PPC over IMA/PSP is a way more convenient. It saves you quite a few hours you would have otherwise had to spend securing your web. That would also cost you unnecessary amounts of money. Since there is now competition among the CCN’s, we can expect their services only to improve.

There are more PPC than just PayPal and Google Checkout. One of the serious competitors to them is the MoneyBookers. According to, Moneybookers has a great currency conversion rate.

Another example of a PayPal/Google Checkout competitor could be Serve. As described by, it is a new service offered by American Express. You link it to your bank account and then send and receive payments by using internet browser. The transaction supposedly happens instantly.


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