Quick Guide to Credit Card Processing

What exactly goes on behind the scenes when you swipe? It’s not crucial information for customers, but it’s something business owners need to know–especially if you don’t accept credit cards.

You may have heard accepting cards will boost overall sales, and it will increase individual customer spending too. So the main reason you might be against could be perceived hassle. It may seem like too much work, or maybe you think it’s too pricey. In fact, it’s actually quite easy, and if you get the right credit card processing partner, it’s affordable and fast. You could start accepting credit cards in a day or two, and it won’t cost you a thing to begin.

First, you need to understand credit card relationships. There’s the customer’s bank, which is called an issuing bank, because it issues the credit card to the customer. Then there’s your bank (you being the business owner), referred to as the acquiring bank. There’s also a credit card network, like Visa, MasterCard, or Amex, for example. These are sometimes tied to bank cards.

Participating partners

To link up all these institutions, you need a payment processor, sometimes called a merchant processor or a merchant account provider. Businesses require one in order to accept credit card payments from their customers.

To start accepting credit cards. a business must open a merchant account. Some payment processors charge for application and take many days or even weeks to confirm your account. Worse, their application fees are non-refundable. So it is recommended to look for a payment processor with free applications and quick account verification. Check their transaction charges and references to be sure they are reputable.

Setting up your equipment

Next, you need POS (point of sale) terminals. These will depend upon your business model. Door-to-door deliverables and service-based businesses (such as restaurants) often do best with portable electronic keypads. Your staff will offer the card reader to customers, who will swipe their cards, or slip their chip into the slot.

For online stores, you can have your online store integrated so customers can pay directly on your website.

Now you’re ready to go. You can receive credit card payments and the cash hits your account in 24 to 72 hours. Plus, your merchant processor – if you sign up with the right one – can help you avoid chargebacks .

For more information on credit card processing, or to sign up for a merchant account, please call (888) 924-2743 or go to Charge.com.

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