In order to process all the payments you are expecting your credit card customers to produce, you will need payment-processing software. This software handles the transactions between your company and your bank. It is server-side software, meaning the program is not on your companies computers, but rather the servers of the software provider; in this way it is more of a service than a product you buy. You can buy the service outright, or lease it on a monthly basis. Some companies to choose from include VeriSign and Authorize.net.
How it works
Once your company is set up with a merchant account, order forms, SSL Certificates and an account with a payment-processing software provider, you will need to understand how the daily operations of accepting and processing credit card transactions works. When a customer places an order on your web site, the merchant account provider will be the one to receive their virtual payment. Typically this institution holds on to those receipts until the end of the day, at which point they deposit them into your company account (after deducting the applicable fees.) There could be more involvement between your company and the merchant account provider, depending on what ala carte style services you may have signed up for. Customer service, authorization, reporting, billing and settlement services are all a part of some providers suite of service offerings. They may outsource merchant services through third-party companies such as First Data Corp.
There are two methods to authorize payments, each with their own pros and cons.
Batching
Batching is the method most frequently used by smaller companies and involves grouping all the days receipts together and processing them by hand at the end of the day. Special machines and software can be used to do batching. Orders taken via online forms, by phone, or by fax can be collected during the day, and then entered after hours. While this can be time consuming, it does offer an extra level of protection against fraud, which is especially good for smaller companies who can not afford to absorb the cost of fraudulent transactions.