Credit Card Processing 101
No matter what business you have, the main source of its life is the finance. As a matter of fact, this is the cornerstone in foundation of a new business, allowing multiple growth opportunity, favors in expansion plans while protecting business from unfortunate and unforeseen situations. Money should be managed very well with this being said.
Whether you believe it or not, there are a couple of steps to manage the finance of a business and these include establishing merchant account and implementing merchant processing agreement. The steps are actually prerequisites to start with debit and credit card processing. Today, where people don’t carry bundles of money with them when shopping and checks are getting obsolete every passing day, accepting card payments help in determining how advanced a business is.
Merchant account is specialized in order to accommodate the business needs of the merchant by enabling him or her to accept credit cards, debit cards, gift cards and various other modes of electronic payment made by the customers for the services and/or goods of the merchant. Merchant’s account actually has 4 key players and this is the merchant, the customer, the customer’s card issuer and the financial institution of the merchant which he/she holds the account.
So, whenever a customer buys the merchant’s goods and/or services by paying through electronic medium like gift, debit or credit card issues to him/her by the banking service, the transaction is being passed on to the financial institution of the merchant for approval. As soon as the transaction gets an approval by the financial institution to which the merchant has an account, the amount is credited to his or her account.
In the merchant account cycle, payment processor is a vital link to it. Typically, card processing company is a third party appointed by the merchant themselves to manage the gift card, debit card and credit card transactions. The payment processor or merchant processing company is the one that oversees the transaction of fund removal from the account of credit cardholder and the fund deposition in the merchant account.
Credit card processing services offer the merchants with value added benefits for their accounts. It can be proven to be advantageous to your business to choose an experienced and reputable credit card processing service provider. Whether you believe it or not, there are several benefits that you can obtain from making use of such service such as the merchant doesn’t need to be there physically to oversee the transaction since credit card processing companies are handling the process, helps you to keep pace with the ever-growing payment industry, frauds are reduced as a result of dismissal of counterfeit notes and bad checks and the tech support is available 24/7.
Attributed by: Lessons Learned About Businesses