Online Payment Processors

Accepting electronic payments is essential to modern business. The UK is currently Europe’s largest ecommerce economy with two-thirds of consumers having shopped online. The power of the Internet continues to grow with 27.7 million UK adults having used the Internet in the last year. Current predictions believe that the rate of growth of Internet sales will see this channel occupy 15% of retail sales by 2010.

Payment Service Providers (PSP) offer merchants online services for accepting electronic payments by credit card or other payment methods such as payments based on online banking.

Typically, a PSP can connect to multiple acquiring banks and card networks, thereby making the merchant less dependent of financial institutions, especially when operating internationally. Furthermore, a PSP can offer reconciliation services, risk management and multi-currency functionality.

For many small businesses, selling online provides some major benefits. Customers increasingly expect this type of facility and it can improve cash flow significantly.

It’s easy to accept cheques or invoices for your online sales and to process payments in the traditional way. However, because buyers often use the Internet for a speedy service, most sales are paid for with credit and debit cards.

To accept cards online, you will have to make special banking arrangements, but this doesn’t mean you have to have a merchant service.

Payment Service Providers

Common PSPs include:

Online Payment Processors

Payment Gateway

A payment gateway is an e-commerce application service provider service that authorises payments for e-businesses, online retailers, bricks and clicks, or traditional brick and mortar. It is the equivalent of a physical Point-of-Sale (POS) terminal located in most retail outlets. Payment gateways encrypt sensitive information, such as credit card numbers, to ensure that information passes securely between the customer and the merchant.

How Payment Gateways Work

A payment gateway facilitates the transfer of information between a payment portal, such as a website or Interactive Voice Response (IVR) service, and the Front End Processor or acquiring bank, quickly and securely.

When a customer orders a product from a payment gateway enabled merchant, the payment gateway performs a variety of tasks to process the transaction, completely invisible to the customer.

For example:

  • A customer places order on website by pressing the Submit Order or equivalent button, or perhaps they enter their card details using an automatic phone answering service.
  • If the order is via a website, the customer’s web browser encrypts the information to be sent between their browser and the merchant’s web server. This is usually done via Secure Socket Layer (SSL) encryption.
  • The merchant then forwards the transaction details through to their payment gateway, which holds the detail of their merchant account transaction. This is often another SSL encrypted connection to the payment server hosted by the payment gateway.
  • The payment gateway, which receives the transaction information from the merchant, forwards it to the merchant’s acquiring bank.
  • The acquiring bank then forwards the transaction information to the issuing bank (the bank that issued the credit card to the customer) for authorisation.
  • The card-issuing bank receives the authorisation request and sends a response back to the payment gateway (via the acquiring bank) with a response code. In addition to determining the fate of the payment, (i.e. approved or declined) the response code is used to define the reason why the transaction failed (such as insufficient funds, or bank link not available).
  • The payment gateway receives the response, and forwards it on to the website (or whatever interface was used to process the payment) where it is interpreted and a relevant response then relayed back to the customer.
  • The entire process typically takes 3-4 seconds.
  • At the end of the bank-day (or settlement period) the acquiring bank deposits the total of the approved funds in to the merchant’s nominated account. This could be an account with the acquiring bank if the merchant does their banking with the same bank, or a suspense account with another bank.

External Links

60,000 years ago people began to speak.

5,000 years ago people began to write.

600 years ago people began to publish.

47 years ago people began networking computers together.

15 years ago Tim Berners-Lee created the World Wide Web.

Its all pure, clear, free, unregulated information. No middleman, you produce it, you distribute it. However, net neutrality and the internet as we know it is under threat from the big corporates. It happened with the press, it happened with radio and now its happening with the internet.

“You know who won’t be able to pay, it is the little guys and you’ll be crushing the future of inovation…” This video is a look at the history of the communication and where it’s going next.

Media philosopher Marshall McLuhan observed that “The Medium is the Message”. That is, the form of media is what changes consciousness irrespective of the content of that media.

Michael Wesch speculates that the accessibility of the internet both to add and receive content is leading to a massive paradigm shift in human thought and society.

However:

The internet still follows the fundamental form of the written word and the motion picture: non-participatory reception of information.

The exact interface of scripting language is irrelevant. The internet is essentially a series of Guttenberg presses and Edison kinetoscopes connected by telegraph wire.

The accessibility of these devices to add content had only changed the scope of the content, not the basic form. Regardless of who made it, I’m still reading text and watching movies.

A semi-global library is a remarkable acchievement (Remember that most people in the world still don’t have net access).

But the real acchievement of the internet has been to SIMULATE participation. It has made non-participatory addition of responsive content more rapid; even instantaneous.

E-mail or a chat room, for instance, has infinitely sped up communication across distances. But it is still not a fully sensory, participatory conversation, and we’ve had to find ways to compensate for that.

This trajectory will eventually lead to virtual reality. Increasingly sophisticated pseudo-sensory simulations of the full sensory, participatory reality of which we are a part.

This is a movement towards making the non -participatory form imitate the participatory reality.

We’re trying to make the printed word imitate what we already experience every day.

The natural interaction between us and the world.

Leader or Manager?

A while ago a colleague of mine asked me the question “Do you consider your self to be a leader or a manager?”. Initially I responded that I thought myself to be a manager as an important aspect of my role is managing expectations, ideas and developments of an internal CRM system. However, a debate ensued as my colleague believed me to be more a leader than a manager and now I am not so sure which one I am!

So what is the distinction between a leader and a manager? Will the definitions help?

Leader noun

  • someone or something that leads or guides others.
  • someone who organises or is in charge of a group.

Manager noun (abbreviation Mgr)

  • someone who manages, especially someone in overall charge or control of a commercial enterprise, organisation, project, etc.

Does this help me…not yet!


Both a manager and a leader may know the business reasonably well, but the leader must know the business to a finer degree and from a different view point. They must grasp the underlying market forces that determine the past and present trends in the businesses niche, so that they can generate a vision and strategy to bring about its future development and growth. A crucial sign of a good leader is an honest attitude towards the facts and objective truth. Conversely, a subjective leader obscures the facts for the sake of narrow self-interest, partisan interest or prejudice.

Effective leaders continually probe all levels of the organisation for information, challenging their own perceptions and validating the facts. They talk to their constituents and employees to find out what is working and what is not. They keep an open mind to the knowledge they gain. An important source of information for a leader is the knowledge of the mistakes and failures that have been and are being made within their organisation.

Leaders conquer the context, the turbulent and ambiguous events that conspire to blur the facts, while managers surrender to the events in a reactionary manner.

Leaders investigate reality, taking the pertinent factors and analysing them carefully. On the basis they produce visions, concepts, plans and programs of change. Managers adopt the truth from others and implement it without regard to the facts.

There is a profound difference between leaders and managers. A good manager does things right whilst a good leader does the right thing. Doing the right thing implies a goal, a direction, an objective, a vision, a dream, a strategy, a path, a reach.

Many people spend their lives engrossed in the ‘rat-race’, attempting to climb the corporate management ladder in a vein attempt to beat mediocrity and make a difference. Unfortunately, many find themselves climbing the wrong ladder. Most companies and organisations become over-managed through this constant, unending, highly competitive race and under-led by those who lack vision. The managers accomplish nothing or the wrong things beautifully and efficiently. They climb the wrong ladder.

Managing is as much about efficiency as leadership is about effectiveness. Managing is about how things need to be done, leadership is about what things need to be done and why these things should be carried out. Management is about systems, controls, procedures, policies and structures whereas leadership is about, trust, vision and hum capital, people.


Leadership is about innovating concepts, inspiring others and initiating projects. Management is about carrying out these visions and managing the status quo. Leadership is creative, adaptive and agile. Leadership looks to the future whilst also being mindful of the bottom line.

Leaders base their vision, appeal and integrity on a careful estimation of the facts, trends and contradictions. They develop the means to re-define the status quo so that their vision can be realised, hopefully, successfully, whilst also enrolling others into the vision of the future. Without, other peoples buy in, a vision will stall and a period of transition will ensue. Leaders, therefore, have to empower others to accomplish the over-arching goal whilst also rewarding their achievements.

There is a profound difference between management and leadership, but both are important. To manage means “to bring about or succeed in accomplishing, sometimes despite difficulty or hardship“. To Lead means “to guide in direction, course, action, opinion, etc.” The distinction is important.

The most dramatic differences between leaders and managers are found at the extremes. Poor leaders are despots while poor managers are bureaucrats. Leadership is a human process and management is a resource allocation process. Both are important and in many instances managers need to also perform as leaders. Indeed first-class managers have significant leadership ability.

So where does this leave me? My opening gambit included the words “…an important aspect of my role is managing expectations, ideas and developments…” this must naturally lead me to a combination of both a leader and manager. Indeed, in my new role as a web development consultant, I have to set directions for developing concepts and applications whilst also planning, organising and promoting effective action of the task at hand. So I could say I am in a period of transition. In the past few years I have learnt much from those I consider mentors, whether they were aware or not. I have seen how things are managed and lead and from these experiences have built upon my own skill-set. I can neither categorically say I am a leader or a manager, or say what I would rather be; this is something that can only come with time.