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Payment Processing for Schools: How Does it Work?

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With the rising cost of living, Aussie parents across the country are cutting back on their spending and tightening their budgets. However, despite the increase in financial pressures, spending for education continues to grow in Australia. Now more than ever, it’s important for schools to provide parents with easy and convenient payment options. But how does payment processing work? And how can Biz Core make payment processing for schools fast, easy and reliable?


How are online payments processed?

To understand how payment processing works, it’s important to understand how online payments are processed.

Online payments are processed through a sequence of steps involving various technologies and systems to securely transfer funds from the payer to the payee. Here’s an overview of the typical process:

1. Initiation:

The process begins when the payer initiates a payment, usually on a website or through a mobile application, by selecting a product or service and choosing a payment method.

2. Payment authorization:

The payment details, including the payment amount, payer’s information, and payment method, are securely transmitted to the payment gateway for authorization.

3. Payment Gateway:

The payment gateway, a secure service provided by a financial institution or payment processor, receives the payment details and communicates with the payer’s bank or card network for authorization.

The payment gateway also employs various security measures, such as encryption, fraud detection algorithms, and verification processes, to ensure the transaction’s authenticity and mitigate potential risks.

4. Authentication:

Depending on the payment method and security protocols (such as 3D Secure for credit card payments), the payer might be required to authenticate the transaction through a password, PIN, or biometric verification.

5. Authorization response:

The payer’s bank or card network sends an authorization response to the payment gateway, approving or declining the transaction based on available funds, security checks, and other factors.

6. Settlement:

If the transaction is approved, the payment gateway processes the settlement, initiating the transfer of funds from the payer’s bank account or credit/debit card to the payee’s account.

7. Payment confirmation:

Once settlement is complete, the payment gateway sends a confirmation to both the payer and the merchant, indicating that the transaction is complete.

The specific steps and technologies involved might vary based on the payment method (credit/debit cards, digital wallets, bank transfers, etc.) and the payment service provider used for processing online payments. Each step prioritises security, authentication, and efficient fund transfer to ensure a smooth and secure transaction experience for both the payer and the payee.


Payment gateway vs payment processor

Payment gateways and payment processors are key components to how payments are processed, so it’s important to know the difference between the two.

A payment gateway and a payment processor are two key components involved in handling online transactions, but each serve a different function in the process of facilitating payments.

Payment Gateway

A payment gateway is a software service that acts as an intermediary between the merchant’s website or application and the financial institutions involved in processing the transaction. It securely collects and encrypts payment information (such as credit/debit card details or other payment methods) from the customer. It then sends this data to the payment processor for authorization, and receives the response (approval or decline) regarding the transaction’s status.

Payment gateways employ encryption and security measures to protect sensitive payment data during transmission. They ensure the secure transfer of information between the customer, merchant, and payment processor.

Payment Processor

A payment processor is a financial entity or institution that facilitates the actual movement of funds between the customer’s bank (or card network) and the merchant’s bank. It authorizes and validates transactions by communicating with the payer’s bank or card network, checking for available funds, verifying the transaction’s authenticity, and providing approval or decline responses to the payment gateway.

Payment processors handle the settlement process, initiating the transfer of funds from the customer’s account to the merchant’s account upon successful authorization of the transaction.

payment processing for schools; payment processor | Biz Core

Essentially, payment gateways and payment processors often work together in the payment processing chain. While payment gateways handle the secure transmission of payment data between the customer and merchant, payment processors facilitate the actual movement and authorization of funds between financial institutions, playing complementary roles in the online payment process.


How can Biz Core improve payment processing for schools?

Biz Core offers a full service billing solution for schools and educational institutions. Our advanced payment system allows you to easily manage the payment process from start to finish.

With Biz Core’s payment processing solution, your school can:

  • Log and track customer details and enrolment dates.
  • Automate the billing process with automatic reminders, invoices, notices, and receipts.
  • Record and monitor customer interactions.
  • Manage payments including successful payments, failed payments and overdue accounts.
  • Provide parents and families with flexible payment schedules with weekly, fortnightly, and monthly options.
  • Offer flexible payment options with credit card, debit card, recurring payments, and direct debit options.
  • Safeguard both your data and customer data with built-in, multilayered Microsoft Azure Cloud Security.
  • Easily upload, send and store documents, including e-signature documents.
  • Use Biz Core’s sophisticated reporting capabilities and easy-to-use dashboards to see how your school’s accounts are tracking.

Contact us today for more information on how we can make payment processing a breeze for your school!


Payment Processing FAQs


What is a processing fee?

A processing fee is a charge imposed by a financial institution, payment service provider, or merchant services provider for processing a transaction or providing payment-related services. This fee is applied to cover the costs associated with facilitating the transaction and maintaining the infrastructure required for payment processing. The processing fee amount can vary based on several factors, including the type of transaction, payment method, provider policies, and the nature of the service offered.

Can I pay as credit with a debit card?

Yes, in many cases, you can use a debit card to make payments as if it were a credit card. Debit cards typically have a Visa or Mastercard logo, allowing them to be processed as credit cards in situations where credit card payments are accepted.

Whether using credit cards, debit cards, or direct debit, Biz Core makes payment processing for schools and their families easy. Contact us today for more information and a free live demo.

What fees can be charged on a credit card account?

Credit card issuers may charge various fees associated with credit card accounts. These fees can vary among different card issuers and may include the following:

Annual fees

Interest charges

Penalty fees, such as late payment fees and overlimit fees

Transaction fees, including foreign transaction fees and cash advance fees

Miscellaneous fees, such as balance fees and returned payments fees balance

However, fees can vary based on the card issuer, the type of credit card, and the terms of the card agreement. So it’s important to check with your card issuer to confirm what fees you may be charged.