In today's marketplace, it's essential for a business to simply accept credit cards. Credit cards are the foremost commonly used payment method in most of the developed world, and positively within us. Not only do payment cards make it easier for consumers to buy things, they even have many benefits for businesses who accept them. a number of these benefits include: fraud detection and prevention, no more returned checks, money is quickly deposited directly into the businesses' checking account, higher security over handling paper money, and simple accounting. Obtaining card processing for a business, however, are often a frightening task due, in part, to the training curve and jargon related to credit card processing. This text is meant as an introduction to the three main facets of credit card processing: the merchant account, payment gateway, and payment processor.
A merchant account may be a special sort of checking account provided by a bank that permits a business to simply accept payments via credit cards, debit cards, and electronic checks. The account is often thought of as a virtual checking account that accepts electronic money. Typically a business will obtain a merchant account through an agreement with a merchant processor. A merchant services company could also be a corporation that sometimes resells these accounts from larger banks, sets up contracts with payment processors, resells or offers payment gateway services, equipment, and is essentially a one-stop-shop for credit card processing.
A payment gateway is a web program that takes the place of a standard card swipe terminal. a typical payment gateway allows the business to log in securely to their online terminal, fill out a virtual terminal form with a customer payment information, and charge credit cards online. Payment gateways also usually supply a programming API that permits online businesses to simply integrate credit card processing with their online order forms and shopping carts. When a card is charged employing a payment gateway the knowledge is securely forwarded to the payment processor for verification and, if verified, the purchaser card is debited and businesses merchant account is credited for the payment amount. Like any method of processing, there's usually a minimum of 24 hours before the funds are deposited into the merchant account.
A payment processor is probably the foremost important facet of card processing. It’s a financial organization, distinct from the acquirer that processes credit transaction information. Processors provide pre-authorization, post-authorization, fraud prevention, and refund services to companies that accept credit cards. They’re also liable for the distribution of funds between consumers and businesses. The acquirer simply acts because the recipient of the funds from the payment processor. A payment processor is often thought of because the "plumbing" that connects a credit card during a customer hand to the ultimate recipient of that payment.
I hope this short primer helped you understand a number of the basics of credit card processing. Although very basic, knowing these three fundamentals will certainly assist you to avoid unnecessary confusion when speaking with merchant service providers.