DEV Community

Cover image for Online payments 101
Peter Csoka
Peter Csoka

Posted on • Originally published at


Online payments 101

Photo by on Unsplash

The online payment industry is huge. In 2019 alone, about 5 trillion USD process through online payments in the US. You also bought something online at some point in the past, so it affects everyone, but what it is, and how an "average Joe" can understand the movements behind the scene? This series is aiming to answer that.

What is online payment?

Generally, online payment is when a transaction of goods happens between two parties over the internet. It can be for buying something online like a shoe or subscription.

Who is involved?

Processing an online payment usually involves four players:

  1. Customer (you)
  2. Merchant
  3. Acquirer/Processor
  4. Issuing bank

This all sounds still blurry. What are these? That's ok, we are going to deep dive a bit more. I believe the customer part doesn't need too many explanations right now, so I'm going to talk about the rest of them.


It's the website or online service you buying something from. Merchant can technically be services that offering something in exchange for money. If you want, you can also set up a website collecting money from your customer.


The company that is processing the payment on behalf of the merchant. Usually, a 3rd party company helps to facilitate the transaction between you and the merchant. Its main job is to make sure that the transaction goes through and the funds are transferred between the two parties. Processors usually offer other services too.

Issuing bank

Your bank issued the credit card to you on behalf of the card networks (like Visa or Master Card). They are the one who is holding your money and sending the payment on your (and the processor) request to the merchant.

Originally published at

Top comments (0)