Introduction to payments for developers

For those entering the eCommerce world, it can be challenging to navigate the terminology used in the industry and make sense of each party’s role behind the scenes. By utilizing the wonderful tools provided by modern technology and software, any business – no matter where they’re based – has almost no limits. Even a small souvenir shop in the countryside can go global if they have a robust eCommerce website in place and, of course, the right expertise and know-how.  

One of the most significant challenges with internet sales is accepting online payments. Although it sounds like no big deal, transferring money requires a variety of complicated FinTech solutions, combining multiple solutions into a single payment processing platform in order to enable seamless sales and a positive customer experience. This bodes well for business owners who want to expand their reach and enter into new markets. 

What is Zotapay?

Zotapay is a global payment gateway, specialising in China, Southeast Asia and Latin American regions. One of the main goals of Zotapay is to concentrate all available payment methods and solutions into a single, simple-to-use, highly reliable Payment Gateway to make like easy for business owners. This empowers these business owners, known as merchants, with a comfortable and efficient way to manage their income while promoting a professional and smooth experience for their end-users (customers) to encourage repeat business and long-term relationships.

Due to the wide variety of payment methods and solutions available on the market today, it’s no easy feat to find the right solution. A Merchant’s business focus, target audience, company structure, and many other variables are what dictate and determine their specific financial requirements. That’s precisely where Zotapay comes in, applying our unique One Application – One Integration philosophy that makes life easy and lucrative for global merchants. Zotapay’s cutting-edge technology makes doing business online simple, even for smaller merchants or those just starting out in the industry who need expertise and guidance.  

What is a Merchant?

A merchant is defined as any person or company that sells goods or services. In an eCommerce setting, a merchant refers to someone who sells goods or services online. Merchants need to work closely with acquiring banks to obtain what’s called a merchant account. A merchant account enables merchants to receive credit and debit cards through their acquiring bank, a financial institution registered as a member of a card network (also known as a card scheme). 

What is a Merchant Account?

As previously mentioned, a merchant account is an account facilitated by an acquiring bank that enables a company to accept credit and debit cards. Like a personal bank account in terms of numbers and references, the account is explicitly used by a merchant to identify themselves. 

Merchant accounts are, naturally, subject to fees that are added via monthly billing, usually based on the percentage of transactions. In short, a merchant account enables a merchant (business) to receive a payment via credit or debit card that they submit to their acquiring bank and then back to the card holder’s issuing bank. For customers using eWallets, the merchant’s details go directly to the wallet provider and then to the payment processor, etc. We will take a closer look into E-wallets later on in this article.

What is a Payment Gateway?

Payment gateways are essentially software that enables communication to convey transaction information for payments made online. Payment gateway software sends information about transactions to acquiring banks and then receives approval or declined responses from what’s known as the ‘issuing bank’ (which we will cover later). As payment gateways handle sensitive data pertaining to personal information about customers, the need for them to be secure and fraud adverse is of the utmost importance and many cases paramount for a business expanding into new regions or markets. The regulations set by companies like Visa and Mastercard to control fraud are called the Payment Card Industry Data Security Standard (PCI-DSS or just PCI).

What is PCI-DSS Compliance?

While the most common electronic payment method these days is Credit Cards, other alternative payment methods like E-wallets are also growing fast. Naturally, such a big industry, growing exponentially, requires strict security regulations and ensure that measures are in place to protect all parties involved in the transaction process. This is known as PCI DSS, which stands for Payment Card Industry Data Security Standard.

What is a PSP (Payment Service Provider)?

After a merchant account has been opened and approved, when an end-user buys an item with their card, the seller (merchant) submits that transaction data to the dedicated payment processor using a payment gateway. A Payment Service Provider enables merchants to receive and process payments. PSPs work alongside acquiring banks to give merchants the ability to receive funds for their goods. But an Online Payment Service Provider’s role doesn’t stop there as they offer additional facilities for merchants. These include things like full PCI DSS compliance (as explained above) to protect from fraudulent transactions, as well as multi-currency options. 

Understanding Zotapay’s Integration Models  

We offer various ways to integrate with our MetaGate software. The most common way for Payment Gateway Integration is via our hosted PCI payment page (also known as our cashier page), which identifies the country of origin of end-users and offers the most appropriate and relevant payment methods in their local currency and language. Alternatively, merchants who can be validated as PCI certified on their own standing can integrate to the MetaGate in a Direct Model known as S2S (server-to-server). Zotapay has also developed its own plugins for Shopify and Woocommerce, saving the hassle of integrating with our system by downloading a simple plugin.

Zotapay’s Payment Form Integration Flow Explained 

Zotapay’s Payment Form Integration flow (also known as Payment Flow) makes life simple, no matter who engages with the process. The payment flow is fast and straightforward and is carried out by following the 7 steps below. There are also some screenshots showing the flow in visual form. You can get more in-depth information about the Payment Flow by visiting this link, Payment Form Integration.

Understanding Different Types of Payment Processors 

Having understood the role of payment processors, it’s time to take a closer look at different types of payment processors. There are two main types of payment processors: Clearing processors and Money Changers (usually referred to as MCs). So, what’s the difference between them? 

Clearing Processor 

Clearing processors include PSPs, Financial Institutions, and other Payment Channels. A processor provides technology allowing the authorization of transactions and, potentially, receives transaction settlement information. In other words, processors handle the technical side of the merchant services (including the movement of funds). 

Money Changer (MCs)

‘Money changer’ is one of Zotapay’s types of service providers. The money changer is responsible for collecting, converting, and settling funds from local processing countries to Zotapay’s bank accounts. 

What is a Cashier?

A cashier in the context of online payments is essentially the front page than an end-user (customer) uses to purchase items or services online, also known as the checkout process. Customers can choose their preferred payment method from a list of options and are then redirected by our cashier to the relevant bank for payment approval. 

Zotapay’s Cashier payment page relates to the gateway ecosystem in the following ways:

1. Fully customizable to match specific brands.
2. End-users can choose their preferred payment method according to the end-user origin. 
3. End-users can choose an online bank wire option.
4. End-users can use QR codes to complete their purchase.
5. Offers multilingual support.

Check our Cashier Page here!

What is an E-wallet?

E-wallets are becoming an increasingly popular way for people worldwide to shop online using a smartphone or other device. An E-wallet is akin to a pre-paid credit card which can be used to purchase services or products online. E-wallets are essentially similar to credit and debit cards in their application, while an E-wallet also needs to be tied to a person’s bank account to purchase items. One advantage of E-wallets is the fact that they are pre-paid so that the user knows exactly what amount of funds they have at their disposal. E-wallets are password protected and can be used to buy anything from cinema tickets to flight tickets and beyond.

How Does a Transaction Settlement Work?

Essentially, a Transaction Settlement is the name given to the process through which a merchant receives funds from a transaction carried out by customers. Once a transaction has been initiated and approved by the various parties involved in the payment process, the buyer’s issuing bank sends the funds to the merchant’s acquiring bank (via the bank’s payment processor). At this stage, the  acquiring bank will withdraw the funds and then deposit them in the merchant’s account. While this process is relatively quick, the full extent can take up to a few days to complete.

What are Processing Currencies? 

Multi-currency payment processing means that a business can accept credit/debit cards from customers in foreign currencies. As some businesses, especially those with an international reach, charge customers in more than one currency – this is known as multi-currency processing. It’s worth noting that when performing multi-currency processing, things can get a little tricky. This is due to complications that occur when processing in a variety of billing currencies. 

What are Settlement Currencies? 

Settlement currencies refer to the main currency that a merchant gets paid in. Even though many merchants process various transactions in different currencies, their daily, weekly, or monthly settlements are always converted into the settlement currency selected by the merchant. 

What is an Acquiring Bank and How Does it Work?

An acquiring bank is a financial institution that is also a member of a card network or scheme like Visa. Acquiring banks can accept transactions through card networks for merchants. Essentially, the networks make the connection between the banks in order to verify transactions made by customers. Alongside the management of transactions, these banks also take on the risk associated with fraudulent activity that can come through transactions. As such, there are various fees associated with acquiring banks who charge for their services.  

Understanding Order Types

Within Zotapay’s order lifecycle, there are several different order types. Here is a list of these order types:

• Sales Transaction – End-users can top up their balance when they deposit funds (sale transaction). It occurs when an end-user makes a purchase online. 
• Payout – Funds are transferred from the processor to the end-users.
• Reversal (Refund)  – Returns the specified amount to the cardholder’s account. Refunds can be either partial or up to the full amount of the transaction. 
• Top-up – Funding processor balance due to insufficient funds.

Chargeback – When an end-user carries out a transaction with their credit card but then wishes to waive the charge due to an error with the order, product not delivered properly, or some other factor, they contact their credit card company to initiate a ‘chargeback.’

There’s no question that global payments are moving steadily in the direction of cashless. This means that in the next few years, more and more people will be using alternative payment methods, like those offered by Zotapay for all their online purchasing needs. As the world moves cashless, more and more widespread payment solutions are bound to be forthcoming too. That’s great news for merchants who want to sell their products or services worldwide, and for customers in more remote regions who also want to benefit from the same products as everyone else. 

For more information about Zotapay’s range of products and services, check out the company’s website at Zotapay.com. 

For more information about Zotapay’s MG Deposit and Payout API, visit our API Integration Page.