Credit card proccessing software....trying to learn the system...

[hockey97]

HI, I am courious on how online credit card processing works.

Like does the software connect to credit card companies database?

I would like to know what the software really does.

Is it possible to make my own software to bypass using paypal?

I am interested in learning the system of processes that goes behind the scenes of accepting credit cards and debit cards.

[Phristen]

You'd set up an account with a merchant bank of some sort and connect to them via a web service.

[hockey97]

My questions then would be what is paypal?

is it a online bank?

I googled around and found stuff talking about processing gateways where I could use php code to instantly process a purchase directly to the credit card companies using their api.

I been looking around and I do know about merchant accounts, I even googled free merchant accounts which have free setup and all that stuff but their is a monthly fee for the gateway.

I wounder how paypal is able to process payments with banks and credit card companies.

I thought that paypal would directly make contracts to have access to those credit card companies database to allow them to connect to their database to process payments.

I am just interested.

There was one site that offered online transactions for free no charges ecept 10% of each transaction.

I seen with every marchant account you will have to give a certain amount (%) to the credit card companies. of your sales.

I view it as greedy way to do business. I rather have some flat charge either monthly or yearly.

cause that 10% per transaction depends on how much your getting paid for then don't forget the taxes you have to pay on your income.

So you guys don't think there is any way around having to go out and get a merchant account service provider?

[Phristen]

I wounder how paypal is able to process payments with banks and credit card companies.Most likely, they are also communicating via webservices...
I doubt credit cards would allow anyone access their databases directly :)

My questions then would be what is paypal?
is it a online bank?Paypal is an electronic currency...
http://en.wikipedia.org/wiki/Electronic_money
They just provide a more convenient/safe way of storing/transferring your money.