The process of setting up online payment may appear confusing at first, but the hard work is choosing the right service provider. In my search I spoke to everyone from sales agents to bank representatives and I now have a collection of contracts with very tiny print. I put together a summary of the process, things to watch out for, and a comparison of rates. I hope this helps.

HOW IT WORKS: CREDIT CARD PAYMENT FLOW

Customer enters payment information into our secure site (aka Shopping Cart/Checkout).
The payment details are sent to the Payment Gateway for approval.
Gateway forwards the transaction to our Merchant Bank.
Our Merchant Bank forwards the transaction to the Credit Card Issuing Bank for verification.
Credit card bank verifies transaction and sends response code (Approve, Deny) back to our Merchant Bank.
Our Merchant Bank forwards the response to the payment gateway.

Payment gateway stores the results and response digital payment processing agent back to our online store. Payment information is displayed to the customer; i.e. "credit card was charged", "credit card was denied", etc.