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Five Terms Everyone Planning to Take Online Payments Should Know

More than two-thirds of Learning Stream class registration software users collect online payments. One common thread is how confusing the ins and outs of online payment processing can be. It’s almost as bewildering as how carrot and Jell-O salad ever became a thing. Though we cannot explain the salad, do help guide our customers through the payment processing labyrinth. Part of that is providing a high-level understanding of some of the more common terms. Here are five of them:

1. Processor

A payment processor, of which there are many like First Data, GPS, Paymentech, etc., is the link between the financial institution that issued the customer’s card and the financial institution that provides the merchant account. If the card issuer confirms that the customer—the registrant in this case—has enough money or credit available, the processor applies the credit or debit. Otherwise, the transaction is rejected.

2. Payment gateway

E-commerce, which is what Learning Stream facilitates, requires a payment gateway. Learning Stream talks to the payment gateway, which in turn communicates with processors. The gateway is an entry point to the entire process. When a registrant submits the payment form, the gateway takes the encrypted transaction data and pushes it to the appropriate processor. The gateway then communicates the result to Learning Stream.

3. Direct payment gateway

With Learning Stream, a direct process means a registrant would be taken to a secure payment page, still within Learning Stream, after submitting the registration form. Learning Stream then sends the encrypted data to the payment gateway.

4. Indirect payment gateway

Once the registration form is submitted, the registrant leaves Learning Stream is sent to the online payment provider, such as the standard version of PayPal, to complete payment. Though PayPal will communicate if the registrant completes payment, that part of the process does not occur in Learning Stream. Some payment gateways offer direct and indirect options.

5. Merchant Account

Registration fees must go somewhere, and they don’t go into a regular checking account at first. A merchant account is set up with a financial institution or other provider to enable your organization (merchant) to collect credit or debit card payments. After the proceeds from a transaction are deposited into a merchant account, the money can be transferred to a regular bank account.

We hope that alleviates at least some of the confusion around payment processing terms. We’ll be back later with five more terms it’s good to know. If you want to be confused about something, however, ask yourself why it’s necessary to have so many recipes on the web for carrot and Jell-O salad.

If you have thoughts on that or anything to do with registration management or payment processing, please contact us.

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