7 things you must know about credit card processing

7 things you must know about credit card processing

There are seven things you must know about credit card processing as a merchant. These essential facts can benefit both your company and your business practices.

Merchant accounts
A merchant account is a commercial account that enables you to accept credit cards for payment. This type of account transfers funds from customers' swipe cards to your bank account. Merchants have to apply for this account and request on their application which cards they want to accept.

Interchange fees
Credit and debit card companies such as Visa, Discover and American Express impose an interchange fee every time a customer swipes their card to make a purchase. Fees can range anywhere from one to three percent of the transaction total.

Processing fees
Processing fees are higher for purchases made by phone, over the Internet and through the mail. It costs more because there are high occurrences of fraud and chargebacks when a person is not present to verify the transaction.

Chargebacks
A chargeback occurs when a customer has a dispute, is double charged or a credit card expires. In the event of a chargeback, the money is deducted from the merchant's account and returned to the customer.

Mobile processing
According to CNN Money, you can use your cell phone to process a credit card. Merchants typically use their cell phone's Web browser to complete transactions. There are also applications for Apple's iPhone and iPod Touch that can make mobile credit card processing easy.

Payment gateway services
A payment gateway service provides credit card processing over the Internet. It is a reliable way for customers to make a payment with an electronic check or credit card. It also gives them ease and flexibility when shopping.

Secure card processing
Shoppers are hesitant to complete a transaction if they are uncertain about a business's card-processing security. Make them feel confident when they purchase from you by using SSL encryption for online transactions and disclosing your security measures.

Published: March 29,2023