An online payment processor is an authorized company that can process credit card transactions between sellers and buyers. These companies let merchants to receive payments (credit card or debit) online by ensuring a bank connection.
Functions of an online payment processor
The processors are able to perform various functions, like:
- evaluate the validity and existing approval of transactions;
- use anti-fraud measures in order to make sure that the transaction has its starting point it claims it does.
They also have to comply with certain standards and regulations which are set out by credit card associations. The rules include aspects on fraud, identity theft, charge-backs etc).
Our lawyers in Luxembourgcan easily help you complete every procedure for opening an online payment processor, so feel free to seek counsel from our law firm.
Types of payment processors in Luxembourg
There are at least two main types of online payment processors:
- front-end online processors make sure that banks' merchants are being supplied with settlement and authorization services and also these kind of processors have card associations connections.
- back-end online processors take settlements from the front-end ones and move the capital from the issuing bank to the merchant one (through The Federal Reserve Bank etc).
Processors do not usually market their services, preferring to stay in the background, often processing payments for partnering member service providers and independent sales organizations. Our attorneys in Luxembourgcan guide you through the process of opening an online payment processor and explain all the details to you.
You can also watch the video below for information on how to establish an online payment processor in Luxembourg:
Other functions and aspects of an online payment processor
This type of processor checks the details received in an operation that takes a short time to complete and forwards them to the card's issuing bank for verification. After it receives the confirmation that the details have been verified, the input will be passed back by means of the payment gateway to the merchant so as to finish the payment transaction.
Do not hesitate to ask our lawyers in Luxembourg in case you decide on opening an online payment processor. Our team can provide you with further information on the required steps that need to be followed, as well as with other legal matters in Luxembourg.
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