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. Contact one of our helpful account representatives to assist you in the setup of a high risk merchant account or offshore merchant account for a high risk merchant.