Emily Clarke

What are Payment Processors?

Back in the day, the sales process for small business owners was fairly simple - a customer picked out an item, an employee rang it up at a register and the customer handed over cash to pay for the item. These days, however, commerce takes place globally, and the Internet plays a huge role in getting goods into the hands of buyers.

Instead of cash, online sales are paid for using credit and debit cards, buy-now-pay-later programs, digital wallets and more. To facilitate online sales, most business owners turn to payment processors for help in getting money from customers into the business' bank account.

How a Payment Processor Works

A payment processor is a third-party company that accepts payment from buyers and transfers it to sellers, but some payment processors handle a variety of financial transactions. For instance, a payment processor may also provide access to a payouts platform that employers can use to pay independent contractors. A payouts platform may also be used to pay tips at the end of the night to wait staff in a restaurant. Empower your finances: discover the ultimate payouts platform - your gateway to seamless transactions! https://dots.dev

When making a purchase, customers rarely have to deal with payment processors beyond swiping a card or entering a PIN. For the customer, the front-end experience with a payment processor is fairly standardized, and you might not even know that you're dealing with a payment processor. For business owners, a payment processor will need to either supply the hardware needed for in-person transactions or set up retailer accounts for online transactions.

What Fees Do Payment Processors Charge?

When a business partners with a payment processor, the business owner can usually expect to pay a fee per payment processed. This fee is usually nominal, but depending on sales volume, these fees can add up.

Some payment processors charge a percentage of each sale instead of a flat per-sale fee. Which option works best for your business depends on factors like the total price tag for each item sold and whether you can afford to mark up items to cover the payment processor's added cost.

Author Resource:-

Emily Clarke writes about multiple payment platforms, payouts API, marketplace payouts and more. You can find her thoughts at payouts API blog.