The Flow of an Online Transaction

30 September 2015
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Although there are small differences from one broker to the next, they all have at least one thing in common…everyone needs online payment processing solutions. So as we know, one of the main steps to launching a Binary Options of FX operation is choosing the right payment solution provider (PSP). Brokers today spend so much time concentrating on the terms and pricing without fully understanding the actual flow behind an online payment transaction.

In order to actually understand the payment solutions behind your Binary or FX operation, you need to start with the basics. Let’s start with the flow on an online payment transaction, starting with the end-user.

The chart shows the flow of an online transaction, from the point the end-user enters the deposit page to  the transaction results.

The chart shows the flow of an online transaction, from the point the end-user enters the deposit page to the transaction results.

The Process

  1. Brokers spend time and money on marketing efforts in order to generate as many registrations on their platform as possible. The transaction flow originates when the end-user decides to fund their trading account on the brokers’ website.

  2. Once the user navigates to the deposit page they select the deposit amount and currency desired.

  3. With most payment providers, at this point the user is redirected to a separate PCI secure hosted payment page or an iframe to fill out payment details and complete the transaction. This page will display the payment methods available based on the payment solutions the broker has and locality of the user.

    A secure hosted payment page means that your clients are depositing on a safe and secure PCI compliant page, assuring quality security measures. The payment methods the end-user sees will vary depending on your available methods, whether it is credit/debit cards or alternative payment methods (APMs).

  4. The transaction is then transmitted to the appropriate processing channel based on the brokers’ available solutions and the users’ payment method. The transaction can be sent through a PSP or alternative payment method, ultimately passing the transaction data to the acquiring bank where the data is collected and sent to VISA/MasterCard interchange network.

    The acquiring bank is the bank that coordinates the transaction of receiving the money from the issuer bank (the bank that issued the end-user’s credit card) and sending it to the merchant.

  5. The transaction is being sent to the issuing bank according to its BIN number. A Bank Identification Number (BIN) is the first four to six digits of a credit card. This number is used to match transactions to the correct issuer.

  6. The transaction is approved or declined by the issuing bank based on certain parameters and the client’s available balance and the results are transmitted back through VISA/MasterCard’s Interchange network.

  7. Once the transaction is approved or declined it is submitted back through the network to the end-user. As shown in the chart, the transaction results are sent to the acquiring bank and back to the PSP. Finally it reaches the PSP who sends the transaction results to the merchant’s system and of course the end-user.

If you’re in the market for payment processing solutions we recommend first becoming familiar with the flow of an online transaction. After all, you spend time and money to bring leads – and you can’t convert them without reliable payment solutions.

B2Binary is here to help you make educated decisions,
contact us and let us point you in the right direction.

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