Whether you close your sales over the internet or in stores or in a mixture of both, you may soon start considering the use of credit card processing in order to help your customers pay you faster.
The most difficult part may not be debating whether or not to use credit card processing, but actually finding and choosing the best merchant provider of accounting. This decision bares more impact in your bottom line that the first one.
Although having credit card processing may be fairly easy, merchant accounts provide different services. Some of them may have different fees, rates and limits, and especially customer service. It is up to you to make up a mix of services and rates that benefits you and your customer the most.
Here you will find the process and some especial considerations that will allow you to find the most appropriate solution.
How does credit card processing actually work? you may be wondering. Without too many details, this is what usually happens:
The software captures the information regarding the customer and the sale and it will later transmit it to the acquisition bank.
An authorization is later requested by the acquisition bank from the one emitting the card. Once it is accepted, the first one will process the transaction and will request yet another approval.
The credit card processing software will allow you to review the transaction and send a confirmation to the acquiring bank.
The funds are then transferred from the emitting bank to the merchant account.
The funds are then transferred from the customers' account to your business account.
And this is how credit card processing works. Now, it is needless to say all parties involved in this process have a cost advantage. Here are the primary fees to consider:
A one-time fee is charged in order to get started. The Transaction fee which the merchant pays for every transaction. There is also a Discount rate which is a flat percentage charged to the merchant for every transaction. Lastly, there is a Rate of return of charge which is a percentage of monthly sales "held" in reserve to offset the cost of fraudulent transactions
The most difficult part may not be debating whether or not to use credit card processing, but actually finding and choosing the best merchant provider of accounting. This decision bares more impact in your bottom line that the first one.
Although having credit card processing may be fairly easy, merchant accounts provide different services. Some of them may have different fees, rates and limits, and especially customer service. It is up to you to make up a mix of services and rates that benefits you and your customer the most.
Here you will find the process and some especial considerations that will allow you to find the most appropriate solution.
How does credit card processing actually work? you may be wondering. Without too many details, this is what usually happens:
The software captures the information regarding the customer and the sale and it will later transmit it to the acquisition bank.
An authorization is later requested by the acquisition bank from the one emitting the card. Once it is accepted, the first one will process the transaction and will request yet another approval.
The credit card processing software will allow you to review the transaction and send a confirmation to the acquiring bank.
The funds are then transferred from the emitting bank to the merchant account.
The funds are then transferred from the customers' account to your business account.
And this is how credit card processing works. Now, it is needless to say all parties involved in this process have a cost advantage. Here are the primary fees to consider:
A one-time fee is charged in order to get started. The Transaction fee which the merchant pays for every transaction. There is also a Discount rate which is a flat percentage charged to the merchant for every transaction. Lastly, there is a Rate of return of charge which is a percentage of monthly sales "held" in reserve to offset the cost of fraudulent transactions
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