How an online card payment works (quick flow)
- Customer enters card details at checkout.
- Payment Gateway encrypts and sends the request.
- Acquirer (the merchant’s bank/processor) forwards it to the Card Network (e.g., Visa/Mastercard).
- Issuer (customer’s bank) approves/declines.
- Authorisation is returned; later, you capture (settle) funds.
- Settlement/Payout: funds move to your business bank account.
Glossary: the essentials (plain English)
Acquirer / Acquiring Bank:
Your processing partner that accepts card transactions on your behalf and settles funds to you.
Issuer:
The customer’s bank that issued their card.
Card Networks / Schemes:
Visa, Mastercard, JCB, etc. they move the data and set many rules/fees.
Merchant Account:
The account configuration that lets your business accept card payments.
MID (Merchant ID):
Your unique identifier with an acquirer.
MCC (Merchant Category Code):
A four-digit code describing your business type (affects risk/fees/rules).
Payment Gateway:
The secure tech that captures and encrypts payment data, passes it to the acquirer, and returns results to your site/app.
PSP / Payment Service Provider:
A company (like QubePay) that bundles gateway, acquiring connections, risk tools, reporting, etc.
CNP (Card-Not-Present):
Transactions where the card isn’t physically present (e.g., eCommerce).
3-D Secure (3DS):
Extra cardholder authentication step (e.g., one-time passcode). Helps reduce fraud/chargebacks and meet SCA rules in some regions.
PCI DSS:
Security standard for handling card data. Your provider/gateway should help minimise your PCI scope.
Tokenisation:
Replacing card numbers with secure tokens so you can store “card-on-file” safely for subscriptions/one-click.
Authorisation:
A funds check/hold by the issuer. Expires if not captured.
Capture / Settlement:
Finalising the charge so funds move to you.
Refund:
Returning money to the cardholder (full or partial).
Chargeback:
A customer dispute through their bank that reverses a transaction unless you successfully respond.
Retrieval / Dispute:
Information request or formal dispute process from the issuer.
Interchange:
Fee paid to the issuer; varies by card type/region.
Scheme Fees:
Fees paid to card networks.
Acquirer Mark-up:
Your processor’s pricing on top of interchange + scheme fees.
Blended Pricing:
Single all-in percentage + fixed fee per transaction.
Interchange++ (IC++):
Transparent model showing interchange + scheme + markup separately.
Rolling Reserve / Holdback:
Temporarily retaining a % of volume to cover risk/chargebacks.
Descriptor:
The text that appears on your customer’s card statement (helpful to avoid “who is this?” disputes).
AVS / CVV Checks:
Address and security-code checks to reduce fraud.
Velocity Rules:
Limits on frequency/amount to stop bots/testing.
Risk Monitoring:
Real-time analysis to flag suspicious transactions.
SCA (Strong Customer Authentication):
Extra checks required in some regions (e.g., EU/UK) for many online payments.
Pricing explained (the quick version)
Every card transaction typically includes:
- Interchange (→ issuer)
- Scheme fees (→ card network)
- Acquirer/PSP markup (→ your provider)
Blended = one simple rate.
IC++ = fully itemised; can be cheaper for some mixes but is more detailed.
Ask providers for: pricing model, cross-border fees, currency conversion, chargeback fees, refunds, monthly minimums, and settlement timelines.
Risk & compliance (why it matters)
Card networks enforce rules to keep the ecosystem safe (fraud thresholds, dispute ratios, authentication standards, prohibited goods). Staying compliant protects your MID and lowers costs.
Core controls to expect from a good provider:
- 3-D Secure + exemptions where allowed
- PCI-aware integrations (minimise your scope)
- AVS, CVV, IP/BIN/geo checks, velocity rules
- Device fingerprinting & behavioral analysis
- Chargeback alerts and dispute workflows
- Clear reporting on approval rates, declines, fraud, and disputes
Onboarding checklist (what providers usually ask for)
- KYB/KYC: Company registration, ownership/shareholders, IDs, proof of address
- Business model: URL, product/service description, fulfilment timelines, T&Cs, refund policy, privacy policy
- Processing profile: Expected volumes, average & max ticket, countries sold to, currencies, historical chargebacks (if any)
- Banking: Settlement account details
- Compliance: Any licenses (if applicable to your sector)
Tip: Clear policies and a professional website speed approvals.
FAQs (straight answers)
1) Do I need both a gateway and a merchant account?
Often, your PSP bundles both. Some merchants choose a separate gateway + acquirer for flexibility.
2) What’s a “good” approval rate?
Varies by sector/region. Many aim for 90%+ domestic approvals; cross-border can be lower. Good routing and 3DS strategy help.
3) How fast do I get paid?
Commonly, T+1 to T+3 business days. High-risk models may have reserves or longer cycles.
4) Can I reduce chargebacks?
Yes, use 3DS, clear descriptors, fast support, tight fraud rules, accurate product pages, and delivery proof. Respond to disputes on time.
5) What’s the difference between auth and capture?
Auth reserves funds; capture completes the charge. Many eCommerce flows authorise at order and capture at shipping.
6) What is a rolling reserve, and why is it used?
A temporary hold on a small % of settlements to cover risk. Typically released after a defined period (e.g., 90 days).
7) Blended vs IC++ which is better?
Blended = simplicity. IC++ = transparency and potential savings depending on your card mix. We can model both.
8) What’s a descriptor and why do I care?
It’s how your charge appears on a card statement. A clear descriptor reduces “I don’t recognise this” chargebacks.
9) How do I store cards for subscriptions safely?
Use tokenisation via your gateway/PSP; never store raw card data on your servers.
10) Do I need 3-D Secure for every transaction?
Not always. It’s great for fraud/liability shift and is often required by regulation in some regions. Smart routing + exemptions can balance conversion and security.
How QubePay helps (and what to ask us for)
- Global card acceptance: Visa, Mastercard, JCB, and more, with multi-currency support.
- Friction-right security: 3DS2, tokenisation, velocity & risk scoring, dispute tools.
- Transparent pricing: Blended or IC++; clear statements and dashboards.
- Fast onboarding: Guided KYB/KYC and policy templates to speed approval.
- Actionable analytics: Approval-rate insights, decline reasons, and fraud reports.
- Human support: Real people, real answers, plus proactive optimisation tips.
👉 Want a plain-English pricing comparison or a readiness checklist for your store? We’ll send one, no strings attached.
Takeaway
Understanding the language of payments helps you choose better partners, improve approval rates, and keep disputes low. Use this guide as your cheat sheet and if you want a second opinion on quotes or setup, QubePay is happy to help.
Start the conversation: 2025.qubepay.com/ | info@qubepay.com
