Front Ends and Back Ends

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Okay, get your mind back on track here.  We’re talking about front and back ends in payment processing.

Certainly not as interesting as your original thoughts, I’m sure.

These terms are tossed about by merchant account providers.  If you want to impress, mention them yourself.  If you want to embarrass, ask a new merchant account representative what the front and back ends are.

Front-Ends.  The processing network aka platform that the credit card terminal communicates with for authorizations and capture of transactions. Common front ends are Paymentech, Global, and Vital.

Back-Ends.  Grabs the captured transactions, runs them through the interchange system and generates an ACH file for merchant settlement. Back ends also handle chargebacks retrieval requests, and monthly statements provided to the merchant.  In some instances, like Vital and Global Payments, a front-end also owns a back-end network. In other instances, front-ends require a separate back-end.  For example, a Paymentech front-end with the FNBO back-end.

A payment gateway is your secure interface with the processing networks.  

Interested in secure payment processing for your business?

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In the expanding world of ecommerce credit card fraud, here’s an interesting scam.

You might have seen sites offering gift cards for a discount.  You probably figured it was way for folks to pocket some money by simply by selling a gift card they did not want.  Sounds innocent, right?

Instead, a cybercriminal using stolen credit card information, buys a gift card.  The gift card is then sold through a gift card site, auction sites, Craig’s List or other sites.

As a result, the cybercriminal has successfully launders or fences the stolen money, which was in the form of the stolen credit card information.

Billions of dollars of gift cards are sold every year.  Gift cards outsold regular merchandise during last year’s Christmas season.  Gift cards are a perfect vehicle for laundering money because the cards are anonymous and are not traceable to a particular person.

Certainly there are some gift cards that are legitimately resold.  But lots of the resold cards represent quick cash for internet criminals who move quickly from victim to victim and escape with no trail into cyberspace.

Interested in a secure payment processing account for your business?


Everyone has read about the rise in cross border payments.  And the growth is real. 

Yet, international payments usually make up less than 2% of a country’s total transaction volume.  Banks in most countries have long focused on the immediate and largest market, which are payments inside national borders.

A bank must decide how much money to put into developing international payment options.  At what point is it worthwhile to bear the cost?  Or does it make more sense simply to outsource the function?

Adding international options is technically challenging.  Is really worth the time and effort to process what are, in essence, a small number of transactions compared with the total transaction processing volume?

There are other obstacles standing in the way that make smooth international payments challenging.  For instance, a bank in one country cannot clear ACH transactions in other countries.  Therefore, banks need to have banking partners in different countries.  Each link in the chain must understand the differences between world banking systems

For instance:

  • When should payment be released so it is received on the desired date?
  • What are the country currency holidays?
  • Is there time to settle the FX transaction to eliminate risk?
  • Are the payments compliant with international regulations?  For instance, sanctions from the US Treasury or other regulators.
  • How are FX currency conversions to be handled?  Does the bank have a trading desk and skilled personnel to handle the transactions?

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Compliance is Necessary to Keep You Safe

Does every company have to comply with PCI DSS security regulations which protect cardholder information?

You bet they do.

Any merchant or payment provider which stores, processes, and/or transmits cardholder data must be PCI DSS compliant.  Regardless of how big or small the company is or the number or volume of payment processed. 

No payment or cardholder information can be retained by merchants unless incredibly strict compliance is achieved and maintained.

But wait, there’s more.

PCI security requirements apply to more than cardholder information in a digital form. 

Companies also must get rid of printed material that contains payment or cardholder information.  Disposal must be done in a responsible way which includes complete shredding of documents.

Entities that handle payment card transactions are categorized into 4 distinct levels.  The levels determine the validation processes that must be performed and maintained to ensure compliance.

  • Level 1: Merchants with more than 6 million card transactions.  Merchants which have had cardholder data compromised, regardless of size of merchant, are also included in Level 1.
  • Level 2: Merchants with card transactions between 1 and 6 million
  • Level 3: Merchants with card transaction between 20,000 and 1 million
  • Level 4: All other merchants

Off-load Compliance to Your Payment Gateway

Using a PCI-DSS compliant payment gateway helps you comply with regulations. When your process through a secure gateway, you can offload many of the PCI-DSS security requirements to the gateway provider. 

The gateway encrypts transactions, provides extensive security functions, protects you from processing vulnerability, and keeps your payments safe. 


Complying with PCI-DSS security requirements is necessary for all merchants. By using a payment processing gateway, you can offload much of the the “heavy lifting” required for PCI-DSS compliance to the gateway.

Saving you time, effort, and expense of handling PCI compliance on your own. 

How are you currently handling PCI-DSS requirements?

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