Credit card processing is the term given to describing all of the services that are required to accept credit card payments for products and services. These include equipment, software, internet access, technical support, merchant accounts, payment gateways, virtual terminals and more.
The services that are required to accept credit card payments vary depending on the types of payment processing you use. Credit card processing is essential for any modern business to be able to efficiently complete transactions and generate revenue.
What Makes up a Typical Credit Card Processing Setup?
There are two major components involved in credit card processing; the merchant account and the credit card machine.
To accept credit card payments, a merchant account is required. This involves signing-up for an account with a payment processing company that issues the actual credit card machines to use, which are then installed into either physical shops or on computers used by employees of companies. With regards to software, there are innumerable options available to choose from depending on your requirements and the type of business you run.
The merchant account is where most of the charges occur with regards to credit card processing fees, with some merchants opting for a flat fee with no additional hidden charges whereas others charge based on how many transactions are processed. However, there are other costs associated such as monthly software fees for providers that offer customizable user interfaces and additional features, as well as fixed fees for equipment and services such as check processing.
What Are the Benefits of Using Credit Card Processing?
There are numerous benefits to credit card processing; it allows businesses to increase revenue and save costs associated with using cash or cheques. The entire process is automated, meaning that all sales information is entered directly into a computer and the customer's credit card is processed at the same time as payment is received from their bank account or cash is dispensed. This means that there is no need for manual recording of sales information, which can be very costly in terms of time and money spent on staff hours.
Credit cards are also preferred by customers for a number of reasons. Firstly, they are a convenient way to make purchases without carrying around large amounts of cash whereas other forms of payment such as cheques cannot be processed until after funds clear from the customer's account which can take up to 7 business days in some cases. In addition, credit cards also provide customers with protection against fraud and theft that cannot be offered with other forms of payment, resulting in increased customer satisfaction.
What Are Some of the Disadvantages Associated With Credit Card Processing?
Whilst credit card processing offers numerous benefits to both business owners and customers alike, it is not without its drawbacks. Firstly, some businesses are daunted by high fees involved in setting up an account which can be up to several hundred dollars depending on the type of merchant account provider. Another disadvantage is that customers are unable to see how much money they are spending until after their purchase or after signing for purchases made via debit or pre-paid cards, which can prompt them to overspend if they do not have a clear understanding of what they are purchasing.
What Are the Different Types of Merchant Accounts? In order to accept credit card payments, a merchant account is required. This involves signing-up for an account with a payment processing company that issues the actual credit card machines to use, which are then installed into either physical shops or on computers used by employees of companies. With regards to software, there are innumerable options available to choose from depending on your requirements and the type of business you run.
The merchant account is where most of the charges occur with regards to credit card processing fees, with some merchants opting for a flat fee with no additional hidden charges whereas others charge based on how many transactions are processed. However, there are other costs associated such as monthly software fees for providers that offer customizable user interfaces and additional features, as well as fixed fees for equipment and services such as check processing.
Finding a Suitable Merchant Account Provider With so many different credit card machines available to choose from in addition to merchant account providers, it can be a daunting task to find a suitable provider that offers the type of equipment and service required. It is therefore best to do some research online with regards to the types of merchant account providers in your area and what they offer, as well as how many complaints or negative reviews there are about them which you can find via customer review sites such as the Better Business Bureau (BBB).
