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REAL-TIME CREDIT CARD
TRANSACTIONS
Whenever a customer
clicks on “Purchase” button in the order
form, the customer details are
transferred to a server. What occurs
when a server receives details?
Technical solution that is diverse
becomes enormous. These solutions vary
by automation level, security features,
price, and several other factors.
The main differentiation
factor between solutions is deferred
processing versus real-time processing.
In real-time processing, the credit card
is approved immediately and the results
are shown to the customer immediately.
In deferred processing, an order gets
forwarded to a dealer who in turn
processes the placed order. Both these
methods have their own up-comings and
short-comings.
Real-time Processing –
The main advantage in this type of
processing is a customer is able to see
the results instantaneously. If a dealer
sells information or software which can
be delivered electronically, then
real-time processing is invaluable as
the order can be filled within minutes.
However, if the order has to be shipped
then this feature makes little
difference.
Real-time processing
makes a customer more confident as they
are assured that their card is approved.
Hence, in case of errors, they could be
corrected immediately. The prospect of
seeing the results immediately attracts
hackers. Hence, this feature could have
higher percentages of deceptive
transactions.
There are 2 methods for
real-time processing. The commonly used
method is by using processing providers
whose domain is providing internet
transactions. This method is used to
transfer when someone changes their ISP.
The other method is to set up processing
software for credit cards on the
company’s server. For using this method,
a modem needs to be installed onto the
server and has to be connected to a
phone line.
While using real-time
processing, one has to ensure the
software being used doesn’t maintain
transaction logs on a server as it
contains details which could assist the
hackers.
Deferred Processing – If
the deferred method is used for
processing credit cards, the orders
cannot be filled immediately. Hence,
this method of processing is more useful
for businesses that do not require
delivering their goods on the internet.
The main advantage for implementing
deferred processing is one can inspect
the orders manually after which
corrections can be made before the order
is shipped. Deferred processing works
out cheaper when compared to real-time
processing as no payments are made to
anyone for special processing. All that
is required for processing the credit
card is the processing software. This
software can be used for both phones as
well as internet orders. This feature
acts as an added advantage. Additional
processing costs are not incurred, which
only adds to the advantage of using
deferred processing. However, the main
disadvantage of using deferred
processing is that it needs daily
attention. This is because the orders
need to be downloaded and processed each
day. Also, the orders that have been
stored on a server need to be encrypted
so as to secure them against hackers.
It is a difficult task to
make a decision on which method suits
the business best as integration issues
need to be considered. |
