In 2011, $1.9 trillion were charged in the U.S. alone. Online transactions were a major contributor to that figure. Credit cards are now being used to pay for both large business-to-business transactions, along with $1 bottles of water at convenience stores. Unfortunately, choosing a credit card processor is not a straightforward decision, due to variations in fees charged and services available.
The first step is to research the different types of credit card processors. Your bank is probably the first place to look, as they probably offer a business package that includes merchant services. Most banks do not actually process credit card transactions themselves, but typically outsource the work to a third party credit card processor. The bank will look carefully at your business before they decide whether or not to accept your application. Another alternative is to use an independent sales organization (ISO). These are registered credit card merchant brokers who may represent one or more third party processors. They set-up and service credit card merchants, but do not do the actual processing. An ISO may be less selective than the bank, but probably will charge more. Be very careful when evaluating potential ISO suppliers. Some are reputable, established companies that provide good customer support. Others may be “questionable” operations.
To qualify for a merchant account, the service provider wants to be sure that you are a legitimate business. They will check the credit history of the owners or officers, and require credit references from your suppliers. An important concern for the providers is whether your business is likely to have a high incidence of chargebacks. A chargeback is a reversal of a sale that was initially credited to your account. The chargeback may result from an error made by the cardholder's bank, a misunderstanding by the customer, or fraud. Typically, the sale of tangible products is considered be much safer than the sale of services. Providers will also consider the type of credit card transactions that you will primarily be doing. Card-present transactions are sales where the merchant physically swipes the credit card and obtains a signature in person. These are considered to be much safer than card-absent transactions that occur by phone, mail or online. Being a higher-risk merchant will not necessarily prevent you from obtaining a merchant account, but it may increase your costs.
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Posted by: John Shriber | September 29, 2013 at 11:55 PM
Credit card processing is really a major concern for credit card service providers as well as credit card users. This processing must be fast and very fine. However there are some credit card company outsource these services.
Posted by: same day loans | May 08, 2013 at 10:08 AM
Your bank is probably the first place to look, as they probably offer a business package that includes merchant services.
Posted by: loans no credit check | March 05, 2013 at 05:13 AM
Credit card processing is very complex and difficult, Thanks for sharing such great ideas here on how Credit card has been processing.
Posted by: Credit Card Debt Relief | February 07, 2013 at 05:27 AM
Credit card processing is an important part of credit card industry. This credit card processing is not so easy. In this industry most of the credit card companies prefer outsourcing of this processing job to any third party credit card processor.
Posted by: quick cash | February 01, 2013 at 06:05 AM
We must never underestimate credit card processing. It is really so difficult and typical for consumers as well as credit card providers. Generally most of the banks do not actually process credit card transactions themselves, but actually they outsource the processing work to any third party credit card processor.
Posted by: payday loan | January 29, 2013 at 06:31 AM
People should not under estimate Credit card processing, it is really so difficult as well as typical. Generally most of the banking financial institutions do not actually do this credit card processing in house, but they really manage it smartly and outsource this processing job to any third party credit card processor.
Posted by: payday uk | January 17, 2013 at 06:16 AM
I also heard that credit card transaction processing is not so easy. It is really difficult to manage for a credit card provider. There are so many banks that provide credit card, but they don’t process credit card themselves. Actually they outsource the processing work to any third party credit card processor.
Posted by: quickloans | January 12, 2013 at 01:25 AM
Credit card processing is really difficult and typical. Generally most of the banks do not actually process credit card transactions themselves, but actually they outsource the processing work to any third party credit card processor.
Posted by: cash loan | January 10, 2013 at 06:09 AM
I'm glad I found this. My wife and I have been wondering about this for a while. We would love to get it for our business. Thanks for the help.
Posted by: credit card processing services | January 04, 2013 at 05:03 PM