What Do Merchants Need to Be Successful Online?

Understanding all of the working parts involved in our partners’ merchants’ success online

Domain Registrar Web/App Developer Web Hosting Shopping Cart Accepting Payments
 The Common Merchant Struggle:
Piecing together all of the working parts to get their ecommerce store up and running

To do this, he knows he will need to:

This is Joe the Merchant Register a domain for

He wants to sell blue widgets online his ecommerce website
and even after all of that, there is
still one missing piece Joe needs….

Find a good web developer Accepting payments

Decide on a hosting company

Select a shopping cart provider

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 Great Question Joe.
What Do Merchants Need to Accept Payments?

Merchant Account Payment Gateway Account

Payment Processor
• A merchant account, also known as a MID • If a merchant wants to get paid, they need a
(short for Merchant ID), is a type of bank A merchant account and payment gateway account.
account that enables merchants to accept payment gateway account both
• A payment gateway account connects to the
connect to the processor & both
and process payments through debit & processor & securely transfers information
credit card transactions and connects the accounts are essential in order between the merchant’s website and their
merchant with the processor. for merchants to accept merchant account.
payments. • A payment gateway is what facilitates the
• Merchants can obtain a merchant account
through a Merchant Service Provider. authorization of credit card payments and is the
equivalent of a physical point-of-sale terminal
• Merchant accounts are a necessity for many located in most retail outlets.
businesses, and are essential for merchants
with ecommerce businesses.

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 Let’s Walk Through the Steps With Joe
Now that Joe knows what he needs, he is only a few steps away from accepting payments on his ecommerce store

Now Accepting Payments!

Joe’s Merchant Account Joe’s Payment Gateway Account

• Joe applies for a merchant account through one
+ • Joe needs a payment gateway account so he
=
of the many Merchant Service Providers. can connect his MID to his website.
• The Merchant Service Provider has a list of • Joe opens a gateway account with an NMI
requirements given to them by their acquiring affiliate which allows him to input his MID.
bank.
• Joe’s application satisfies all the requirements
and he is granted a MID!

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 How Does Credit Card Processing Work?
Understanding all of the working parts involved in processing a credit card transaction

Cardholder Merchant Payment Gateway Payment Processor Issuing Bank Credit Card Network Acquiring Bank
 Key Players in Processing a Credit Card Transaction

Cardholder Merchant Issuing Bank Credit Card

A cardholder is someone A merchant is someone who (Cardholder Bank) Network
who has obtained a wants to accept credit and debit
credit or debit card from card payments from their The issuing bank issues The credit card network
a card issuing bank. They customers (cardholders) for the credit cards to consumers. helps to connect the
are the one who begins goods or services they sell. They They are responsible for issuing and acquiring
the credit or debit card must obtain a merchant account paying the acquiring bank banks by routing the
and set up a payment gateway Suzi’s Bank
transaction by using their for the purchases their appropriate transaction
account before they can start
card to make a payment cardholders make. information between
accepting payments and get paid.
to a merchant for goods Credit Card Network the two banks.
This is Suzi or services. Look it’s Joe!

Payment Processor Acquiring Bank

Payment Gateway
A payment gateway authorizes
The payment processor works to actually process (Merchant Bank)
the credit card transaction from start to finish. It
credit card payments and is what does this by connecting the merchant account with The acquiring bank is also referred to as
securely transfers payment the NMI gateway so it can receive the transaction the merchant bank because they create
information between the details and it also connects the NMI gateway to the and maintain merchant accounts that
Joe’s Payment merchant’s website and their Joe’s Processor Credit Card Network for authorization from the allow a merchant’s business to accept
merchant account. issuing bank. Joe’s Bank credit and debit cards.
Gateway Account

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 Credit Card Transaction Flow

2. Suzi’s Transaction Details are Sent to NMI

The NMI payment gateway references Joe’s MID and,
using a secure connection to the payment processor,
routes the transaction details on to them.

1. Suzi the Cardholder Purchases a Blue Widget

Joe’s Payment Processor
Suzi has been searching for the perfect blue widget and
after finding Joe’s Blue Widgets ecommerce site she
decides to buy one. So she enters in her payment info
and submits the transaction.

Joe’s Payment Gateway Account Joe’s Merchant Account

with an NMI Affiliate

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3. Joe’s Payment Processor Receives the Transaction Details
After Joe’s payment processor receives them, they send the request on to the
Credit Card Network which identifies the issuing bank for the payment card and
sends the request on to them.

Step 3 Step 3

Step 4 Step 4
Joe’s Payment Processor
Issuing Bank (Suzi’s Bank)
Credit Card Network

4. Suzi’s Issuing Bank Approves or Declines Transaction

After the issuing bank checks Suzi’s account, they either approve or decline the
transaction and then send the results back to the Credit Card Network which
sends it back to Joe’s payment processor.

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 5. Joe’s Payment Processor Relays the Results back to NMI
After Joe’s Payment Processor receives the results, they relay them back to the NMI gateway
where NMI stores the results and then sends them back to the website where Suzi & Joe see the
approval or decline.

Joe’s Payment Processor Joe’s Payment Gateway Account

with an NMI Affiliate

7. Joe Gets Paid

The issuing bank (Suzi’s bank) releases to
funds to the acquiring bank (Joe’s bank). 6. Suzi’s Transaction was Approved!
After the settlement period Joe’s bank Now that Suzi’s transaction has been approved,
releases to funds to his account where he Joe can now send out the blue widget to Suzi.
can access the money.

Suzi’s Bank Joe’s Bank