Credit Card Processing Service: What Kinds of Rates Should You Expect?
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Posted On :
Feb-24-2010
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Article Word Count :
835
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Most businesses that begin accepting credit cards see a rapid increase in sales and profits, as well as a solid increase in their customer bases. Today’s consumers are turning more and more often to credit cards as their primary means of payment for all types of goods and services.
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Accepting credit cards and processing credit card transactions may seem as simple as swiping a card through a terminal and ringing up the resulting sale. But the processes that these sales involve are actually much more complicated. The role of the merchant account provider is to make these processes as simple and seamless as possible, keeping your business running smoothly and making sure your customers remain happy and content.
To better understand the services provided by a merchant account provider, it can be helpful to understand the credit card processing system itself.
In a retail establishment, a credit card transaction begins when the merchant or customer runs a credit card – or swipes it – through the point-of-sale, or POS, terminal. This terminal has a slot that is designed to decode and “read” the information contained within the magnetic strip located on the back of the credit card. This magnetic strip contains data that identifies the card and the credit account it’s tied to.
Once the card is swiped and the information contained within the strip is obtained by the reader, the data is transmitted to the credit card issuer via a telephone line, through the merchant account provider’s software. In the case of a wireless terminal, which is especially useful to businesses that make sales on the road or in the field, as well as to businesses attending trade shows or other events, no phone line is needed and the card information is transmitted from the terminal to the card issuer via the wireless connection. Wireless terminals also do not require an electrical outlet for power.
When the information is received by the card issuer, the data is compared to the information the issuer has on file for the card. First, the issuer ensures the card has not been reported as stolen, and that the account is active and not outdated or suspended. Once these hurdles are passed, the card issuer can then determine if the account credit limit is high enough to cover the cost of the transaction.
Assuming these criteria are met, the card issuer creates a unique transaction ID and transmits that ID, as well as an authorization code and an approval message, through the merchant account provider, which in turn transmits the response to the merchant’s terminal. If the transaction is declined by the card issuer, a message noting that it has been declined is transmitted instead. For approved transactions, a receipt is issued and the transaction is completed. For as complicated as this process appears, it all takes place within a matter of seconds, almost always under a minute.
During the course of the business day, the merchant account provider may process hundreds of transactions for your business, and keeps track of all of them. At the end of business, all of the credit card transactions are tallied and all of the day’s fees are calculated and deducted from the total amount. Finally, the remaining amount is processed and transferred to the business bank account that has been linked with the merchant account. At the end of the month, the merchant account gather the information from all of the month’s credit card transactions and compiles them into a monthly statement, which is sent to the business owner for his or her files.
Once you understand the steps involved in processing credit cards, it’s easy to see how a well-chosen merchant account can make your business more profitable and keep your accounting processes running more smoothly.
Most businesses that begin accepting credit cards see a rapid increase in sales and profits, as well as a solid increase in their customer bases. Today’s consumers are turning more and more often to credit cards as their primary means of payment for all types of goods and services, and savvy businesses understand the need for accepting credit cards if they intend to thrive and grow.
Customers who use credit cards tend to spend more than those who spend cash, and they tend to make more frequent and more expensive impulse purchases. They also tend to buy larger, more expensive items more frequently than cash purchasers, and to shop more frequently.
Because your merchant account provider will become such a valuable and integral part of your business, it’s important to take your time when making your account selection, to ensure it meets all of your business needs. Some accounts offer so-called bundled packages, which feature account services accessible by both retail and Internet stores, as well as solutions for credit card sales obtained through mail order and telephone sales, and even allow credit card processing to be performed while on the road, through a wireless connection.
A merchant account can offer you and your business the solution you’re seeking to remain competitive and grow over time. For all these reasons and more, it’s easy to see how accepting credit cards can catapult your business to the next level.
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Article Source :
http://www.articleseen.com/Article_Credit Card Processing Service: What Kinds of Rates Should You Expect?_11800.aspx
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Author Resource :
Karen Zabel is a freelance writer who writes about Credit Card Processing Service.
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Keywords :
Credit Card Processing Service, Merchant Accounts, Credit Card Processing,
Category :
Business
:
Business
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