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The World of Payment Processing

Starting in Europe in the Sixteenth Century, paper currency supplanted direct barter as a way to transfer and pay for agricultural commodities, such as tobacco, grains, wool and spirits. The grower or seller took his crop to the local depot and in return, the depot keeper gave a paper bearer demand note to the grower, which could then be traded with other merchants for needed goods and services.

While the systems are far more sophisticated now and the exchange of money for goods is

most often electronic rather than done with a paper bearer demand note, the system remains

just about the same under the hood.

What makes payment processing more complicated in the 21 st Century are the numerous

regulatory requirements that must be followed scrupulously. Therefore, the contemporary

payment processor typically works with its merchants using cloud-based software-as-a-

service (SaaS). This provides the merchant a simple electronic portal (guaranteed to be

always regulatory-compliant) that allows them to do everything they need to do to take credit

cards, cash transactions, make remittances and web-originated payments. The benefit to the

merchant is faster transaction processing, more reliable quality and cheaper per-transaction


Not surprisingly, electronic payments can be vulnerable to fraud and abuse. This misuse of

credit card data opens an avenue of liability and exorbitant expenses for every merchant

accepting credit cards as payment if they have to investigate and settle any fraud or abuse by

themselves. So by working with a SaaS payment processor, the merchant passes off the

responsibility for all processing at the time of the sale. In other words, the SaaS processor

handles the transaction of the sale; the merchant handles the payment due from the

consumer. The processor sends an electronic payment token back to the merchant signifying that the transaction has been completed and is Payment Card Industry (PCI) compliant.

We welcome you to call us at 585-704-6453 to learn


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