Get to know modern payment processing and the key components that affect how you do business. 

Payment processing hasn’t changed much since the world upgraded from bartering to currency. You want to sell something and your customers want to buy it – transaction complete. 

But what makes payment processing different today is the ability to do it well at scale, which includes technology, compliance, information security, accounting, tax, shipping, global reach, and other key elements that are integral to selling digitally. 

  • Good news for buyers: getting your next t-shirt online is much faster, greener, and more convenient. 
  • Good news for sellers: facilitating the transaction is trickier than with cash, but infinitely scalable with the right payment system in place. 

Payment Processing in the Internet Age

The marketplace has become increasingly comfortable with digital payments as security, regulations, and compliance have caught up with the internet wave. Today, you could even say we’re dependent on it. As a result, you can now choose between building a custom payments platform or a slew of ready-out-of-the-box payment processing solutions with varying capabilities.  

Both have their perks and downsides, but the most important consideration is functionality and your return on your investment. Whether you’re new to the subject or a seasoned veteran, it’s well worth the time to look before you leap on a solution to ensure it meets your business goals five or ten years from now. 

To lend a hand in this evaluation process, we’ll be diving into these topics the next few months:

Payment Processing Overview blog image

Payments in a Global Economy

Globalization enables businesses to operate across vast distances, nations, cultures, and currencies. According to the Federal Reserve Bank of San Francisco, online or remote purchases doubled in the last 6 years. Even physical money has become rare as people favor debit/credit cards and online payment platforms like Venmo, PayPal, or Zelle – or now even your smartphone. 

As a merchant, you may sell three products to someone in Maine today, seven to a buyer in Portugal tomorrow, and 15 in your Minneapolis brick-and-mortar store this week. Ultimately, this means that any tech-enabled organization needs tech-empowered payment solutions to make the purchasing experience as quick and convenient as your customers expect.

Let’s explore.

Key Features in Modern Payment Processing Systems

1. Basic Payment Flow

When a customer comes to your physical store or online store, they do their shopping and we hope they initiate payment. It tends to look a something like this:

Online Payment Process blog image

You are the merchant, they are the customer, and if they’re using a digital payment method, a payment gateway is a key part of the process.

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2. Payment Gateways: Gathering the Details

In short, payment gateways request certain information about a transaction and a customer to help confirm the validity of the card or direct payment. For example:

  • Brick-and-mortar stores generally use POS (Point-of-Sale) systems to collect payment information, such as credit and debit card numbers. In this case, the information you need about the customer is stored on the card, plus some sort of security like a PIN. 
  • Online merchants use payment gateways to collect the necessary customer information to make a payment. This info is key for facilitating transactions, but it’s just the start.

The latter group of merchants may include eCommerce, eBusinesses, online retailers, “bricks and clicks,” and more. Your customer makes their selection and upon checkout must fill out a form gathering payment details such as name, address, shipping information, coupon codes, card information, and more – depending on the scenario. 

Online payment process - payment gateways

Payment gateways like these typically work with a variety of card-issuing banks and card associations

  • Card-issuing bank: financial institution that offers branded payment cards from card associations directly to consumers. This may include credit cards, debit cards, key fobs, and prepaid cards.
  • Card association: a network of issuing banks and acquiring banks that process branded payment cards. For example: Discover, MasterCard, Visa, etc.

Besides ensuring that the payment details are securely transferred, the gateway can also check the customer’s credit card number and billing address to make sure that they match. Otherwise, the transaction may get flagged for potentially being fraudulent. If everything checks out, the information passes to a payment processor.

Note: Some services like PayPal and Stripe provide combined payment gateway and payment processing services. For simplicity, we’ll treat them as separate. Let’s dive into payment processors next. 

3. Payment Processor: Processing the Transaction

Payment gateways work with payment processors to make the transaction process fast and simple. A payment processor connects customers and their card-issuing bank with merchants and their acquiring bank to facilitate transactions.

Once the payment processor receives payment information, they contact your customer’s credit/debit card issuer, often their bank, or other relevant financial institution (say, PayPal). With credit and debit card transactions, like Visa or Mastercard, a card network facilitates communication and transfers.

The customer’s card issuer or other relevant financial institution (sometimes called the merchant acquiring bank) will then check to make sure that the customer has the necessary funds or credit to cover the transaction. If the financial institution notices any red flags, say suspicious purchases, they might pause the transaction and contact the cardholder/client. Otherwise, if the funds are available, they will approve the transaction.

Online payment process - payment processor blog image

From here, the payment processor will pass the info back to the payment gateway, which will update you (the merchant) and your customer.

4. How Funds Get Transferred from Customer to Merchants

The payment gateway will let you and your customer know whether the transaction was approved or declined. Assuming it was approved, your customer’s bank or other relevant financial institution will send money to your (the merchant’s) acquiring bank, which is the financial institution you use to accept payments.

The acquiring bank will deposit the money either into a merchant account specific to your business’ merchant ID (MID), or an aggregated merchant account. Your money stays in this account in case of chargebacks, returns, and/or other issues later on. After the appropriate time frame, it’ll be deposited into your designated business accounts.

Online payment process - payment settlement blog image

5. Fast and Secure Transactions

Don’t worry if this is still a bit confusing. Fact is, modern payment systems are intricate and have many stakeholders. But what you get is the ability to process payments worldwide within a matter of seconds. This way, customers can get the products and services they need, and businesses can reel in the revenues needed to thrive.

Yet when it comes to money, speed isn’t everything. In fact, payment systems sacrifice a fair amount of speed in exchange for security. This is a trade we gladly make to preserve relationships with customers who expect us to handle their sensitive information with respect and care. Fortunately, modern payment systems are typically quite safe.

6. How Are Transactions Secured?

Where there is money, there will be fraudsters trying to get away with the loot. The internet is massive and data constantly bounces around on different pieces of hardware via highways of digital infrastructure. Often, criminals will try to hijack the data while it’s being transmitted. 

Fortunately, there are many steps merchants, cardholders, banks, and other entities can take to reduce the risk of criminal activities.

We’ll dive into this topic in more detail soon if you need to know more about acronyms like TLS, SSL, SIEM, PCI DSS, GLBA, GDPR, FISMA, and more. But for now, it’s worth noting that when shopping for a payment system solution or team of developers to help modify what you have, security is an essential component.

The Wrap Up

We covered a lot here, but we just skimmed the surface. We love this topic because it’s our specialty and it’s important. 

Modern payment systems simplify purchases for customers in a world where money is invisible and everything rides on how you handle the data. You may find yourself in a situation where you’re choosing between a custom payment system or an out-of-the-box payment system, depending on your business needs and goals. 

It’s worth a hard look, because as business models change and relationships with customers evolve alongside the internet, out-of-the-box payment solutions often fall short of meeting many companies’ need for more flexible, custom payment platforms.

Whichever you choose, Clear Function is always here to lend a hand. Book a call with us at a time that works for you and we’d be happy to help.

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What is the best payment processor for your small business or tech startup? This is a decision that can easily overwhelm a new entrepreneur considering how many options are currently on the market, but it doesn’t have to! When it comes to payment options, it pays to keep it simple. 

Finding a product that makes it easy to access all of your financial information, processes payments efficiently, and has constant access to support is crucial. Long gone are the days of physical cabinets and hanging folders. Now it’s online servers and cloud backup. The better your digital payment source, the better the opportunity you’ll have to increase your profit and manage your money. 

Throughout this article, we will provide you with different payment processing options so that you can find the right option for your business. We will also answer the top questions you may have when choosing a source and integrating it into your app or website. 


Stripe is a big name in the startup world. They have a great brand reputation and support large startups you probably use regularly like Lyft and Pinterest. 

Benefits of Stripe

  • Ease of integration: Due to Stripe’s large size and support department, you can easily integrate it into your app or website. If you run into any troubles during setup you can contact support and they will help solve any issue! 
  • Developer-Friendly: Do you have a developer on staff who wants to customize the capabilities or design of Stripe’s integration? Stripe provides tools to developers to help them do this! 


Braintree is another payment processor that has a range of impressive clients, including Uber and Poshmark. 

Benefits of Braintree

  • Pricing: Braintree is available for a standard flat price without additional fees to use certain features or to view analytics. This makes it a great choice for small businesses that are trying to keep costs low. 
  • Full Customization: While Braintree is also developer-friendly, it takes it one step further compared to Stripe and allows near-full customization. Developers can integrate Braintree almost any way they want into their current app or website. 


Chances are you have heard of PayPal and most certainly used it without even knowing! They are a long-time payment processing system that has helped small businesses, startups, and large corporations alike. 

Benefits of PayPal: 

  • Easy Setup: PayPal has a long history in the payment processing world and with this comes proven processes. Setting up PayPal for your business is easy to do and if you have any problems the large support team can help with any problem. 
  • Trust and Familiarity: Your clients may already be familiar with PayPal and have more trust in paying you for your goods and services.

How To Choose the Right Processor

All three of these options offer trial periods and walkthroughs with support staff. Try each one out and visit each website to learn more! One might have a feature you like more than another that could elevate your business. 

Why do you need a payment source? 

Now that you are familiar with three great options for payment processing you might be wondering, why can’t I just handle it all on my own through apps like Venmo or Square? While those apps are great for one on one transactions, you’ll want something more complex for your new business. 

Keep in mind that you’ll be taking payments from people all over the world. Staying up to date on PCI compliance, avoiding lawsuits, and keeping track of transaction history can take all of your time if you try to do it on your own! Payment sources do all this for you for a minimal fee, trust us, it’s worth it! 

How Clear Function Can Help

Not only can Clear Function build your app, but we are payment processing experts. We know how to integrate the service into your new tech, customize it to match your needs and brand identity, and help you manage it. Interested in learning more? Schedule a free call with our team to get started!

So you want to create an app. Congratulations! This is an exciting opportunity to develop a product that could impact people’s lives. The mobile app market is primed and ready for new developments. Are you looking to solve a problem that you experience or be at the forefront of a digital trend? 

With so many possibilities and groups to market to, it’s crucial to have a solid plan before starting. Developing an app isn’t as simple as just hiring a developer and giving them complete control. It’s a process that involves several moving parts and hiring the right people. 

You could hire:

  • A business coach to conduct market research and validate your product idea
  • Programmers to work on the app
  • Graphic designers to complete your logo and product design
  • Marketing support to boost your revenue
  • UX/UI designers that work to make the app user friendly
  • Usability testers
  • And finally, a project manager, unless you plan to manage all of these people on your own


You can hire an agency that will help guide you through the entire process with a project manager (like Clear Function!)

If you decide to do it all independently, you’ll need to commit a lot of time and energy to manage all the different stages and hires. Coming into app development as an outsider, you will be bringing unrealistic expectations of what the process looks like. While you may think that it will be easy and quick, this isn’t always the case.

Are you prepared to handle all of the different parts of developing and launching your app? If that seems like a long and confusing process, we recommend hiring an agency with a dedicated project manager. You won’t have to worry about handling all the moving parts, and the benefits will far outweigh the cost. 

6 Challenges of App Development that Project Managers Help Fix

  1. Staying on schedule

Your time is your most valuable resource. The project can get delayed and fall off track when you don’t have someone committed to staying on schedule. Project managers set the plan and are dedicated to sticking to it by emphasizing communications and task management.

  1. Staying on budget

Nothing is more frustrating than committing to a budget only to have it increase significantly. We know that things change and features need to be added, but a project manager knows this going in. They can plan for increased costs and know how to keep a project on budget. 

  1. Communicating with the coaching, development, and marketing teams

Setting up regular meetings and staying in constant communication with each team is essential. Project managers are responsible for being the go-between of what’s happening behind the scenes in development and how that interacts with all other parts of the project like marketing and user testing. 

  1. Communicating with the client

A happy client is the key to a successful project. Clients give complete trust over to the agency they hire to develop their app. The project manager is in charge of keeping the client in the loop on how development progresses and any bumps in the road. 

  1. Planning out different stages of development

Dividing the development stages into sprints and assigning different team members to accomplish the tasks helps keep a project on track. Project managers monitor how each sprint is progressing and help to resolve any development issues that may arise. 

  1. Creating the highest quality product

While you are probably great at creating the highest quality solutions in your field of expertise, it’s difficult to know quality in every component of a project.  A good project manager will have the experience to not only know quality when they see it, but to make the quality of each deliverable more consistent and accessible. Which will make a huge difference for the long-term quality of your app.

Now that you know the benefits of hiring an agency that simplifies the project management process, you can begin the process of finding the right development agency for your app. Maybe that’s a local agency or one across the country. Research and compare different agencies to find the one that fits your needs best. 

Talk to the project manager and hear how they plan to manage your development. You won’t find a perfect project manager, but you will find an expert in their field that can expertly handle your project to save you time and money. 

It’s no secret that COVID-19 has affected everyone in some way or another. Parents have become teachers, non-essential workers are turning the dining room into an office and businesses are having to rethink how they can go digital to accommodate a new business model. 

For businesses that rely on physical stores and office locations, the future in a socially distant world can look uncertain. It may be time to think about how you can adapt to a new digital world so that your company can grow and thrive. Here are some thoughts and advice to guide you in reviewing your business model. 

  1. Assess the short and long-term impact of COVID-19 on your business. 

Before you make any big decisions, it is best to first evaluate how the pandemic has affected your revenue stream. 

Short-term impact: Many businesses are dependent on human interaction and don’t have a way to continue the same level of service digitally. From February to now, has your revenue taken a hit? If you had to close for a significant amount of time, let workers go and didn’t have a way to continue your business online then your revenue stream will look drastically different compared to the same months the previous year.

Were you able to open back up, but have tighter restrictions that have had an effect on revenue? While some effects will only last short-term, it is important to identify which ones could turn into long-term. You might have decided to ride out the pandemic and open up like normal when it is over, but the rising number of cases around the world has shown that businesses must tackle these hardships when they first arise because the old way of business just won’t cut it.

Long-term impact:  With second waves hitting the world, the pandemic is certainly not over. What is the impact long-term that it will have on your business? Because this is something that everyone is dealing with, spending is down and people are trying to find ways to do most things without leaving their house. 

If your business thrives on face-to-face interactions, then long-term could be daunting for you to imagine. If you know that something needs to change then you should start thinking about the solution sooner rather than later. One question to ask your business is: How do I generate revenue without the customer physically present? You are uniquely equipped to solve a problem, you just have to figure out what that problem is, or commit to finding additional ways of solving that same problem. If you can find an answer to that question, you will be able to sustain business long-term. 

2. Assess how COVID has affected your customers.

One thing to understand is that you and your customers are facing similar problems. If you are having difficulties selling your product, then your customers are having difficulties buying it. Not only are unemployment rates at record highs, but people are putting more thought into what purchases are necessities. 

Once you put yourself in the mindset of your customer, you will have a better understanding of what they need and want during these difficult times. You will figure out the best ways to market to them and what products are the right fit to sell.

For example, if you are a car dealership many of your clients may not feel comfortable going out to test drive cars. You could evaluate your customers and come up with a solution: personal car sales concierge. Instead of your customer going all around town trying to find their perfect car, you may take on the hard work of test driving, negotiating a price, and delivering the car to your customer. These innovative ideas are all dependent on the needs of your specific customers. Take the time to talk to them and come up with a solid solution.

3. Develop a strong digital presence with the resources you already have.

If you already have a website and dedicated social media presence, then you are already ahead of the game! Can you use those tools to elevate the services you offer to your customers from home? Do you need to develop another digital tool to best serve your customers? 

If you have a strong customer base, they will not leave you. They still want to support you and use your services, but they want to make sure they are safe as they do so. For example, college students still want to receive a high quality of education, but meeting with 100 other students in a lecture hall is not feasible at this time. Colleges have to reevaluate how they offer online classes so that students still receive the same quality of education from home. 

If you have no digital presence, then there has never been a better time to develop a social media following. With most of the world stuck at home, the internet has become a place more than ever to stay connected and shop for everyday needs. Working with an agency to discover your digital brand and help craft your pages can be extremely helpful, but jumping in and doing the work yourself will automatically be a benefit for your business. 

4. Develop a new digital platform to better serve your customers.

If selling your product or service directly from your website or social media pages is not working, perhaps you have considered developing a new digital platform to meet your needs. This is where a development team comes in. They can assess your needs and best advise you on how to maximize your revenue by going digital through the creation of an app, software, or other digital tools.

Good online tools can open up new markets. They can allow you to reach new customers from around the world and reduce costs that a physical location can bring. People are looking for ways to keep their workforce employed and to keep profits high. Developing a new product could help you through these difficult times and also be a new resource your business could use in the future. 

Define what are the gifts and skills of your team, the benefits your products and services offer, and what desires your customers have. Those same components can be used to shape a new digital platform to service new or existing customers. To go digital is to understand how your business is going to transform outside of your normal mode of operations.

5. Reevaluate how you communicate to your customers

A solid digital marketing plan is key in a COVID and post-COVID world. How can you continue to efficiently communicate with your customers when you now rarely have the opportunity to see them in person?

Not only is having a strong social media presence important, but you have to lead your customers and future customers through a digital sales funnel. Traditional ways of marketing are even harder during a pandemic (billboards, print advertisement, word of mouth) because interactions and physical media are limited. Your sales funnel needs to include email marketing, social media, lead generators and so much more.

How can you be creative in marketing your product or service? Take advantage of the fact that more people than ever are online. Reach out to your customers for feedback on the best way to market to them. 

Facebook marketing is a great, inexpensive way to find customers and let them know that you can solve the problem they have. You are easily able to target specific groups of people based on multiple characteristics. During the process, you might realize that your online target group is different than customers who would come into your physical location. 

Be creative and talk with an expert!

If you’ve taken the time to read our article, you must be looking for ways to rethink your business model because of the COVID-19 crisis. There is not a one-size-fits-all plan for going digital or increasing your digital presence that will work for every business. We encourage you to be creative and find what works best for targeting your specific customers. 

Working with an agency to build a digital product that will help grow your business is another great idea. We invite you to schedule a free Discovery Session with our agency so we can discuss your brand and ways to take it digital.  Contact us today!

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