Credit card processing is a system through which credit card transactions are processed and approved or denied. The type of information that must be collected during the transaction process includes the credit card number, expiration date, billing address, shipping address, customer details etc. This data is then passed on to the merchant’s financial institution for verification.
If cleared it will then allow the merchant to ship the product or provide the service. This is done in real time through an electronic device called a gateway. Every time you swipe your card it has to be routed through this machine so that everything goes smoothly. The total cost of credit card processing includes all fees paid in order for transactions to go through plus whatever percentage is charged by the merchant account provider.
It is important for customers to understand how credit card processing works so they can avoid any surprises when checking out with their purchase. For example, some businesses require that you pay a minimum of $10 in order for your transaction to be processed by credit card instead of requiring cash or check payment which can sometimes cause an inconvenience for those who want to simply buy a single item.
Credit card processing also includes the cost of using the service which is typically around 2 to 4 percent. However, this rate can be fixed or a percentage of each transaction, whichever amount is lower. The fee charged by merchant account providers may include other costs such as monthly minimum fees and equipment fees.
Merchant accounts are required for all businesses that accept credit cards as a form of payment. This is because each time you swipe your credit card through the machine it has to be routed through an electronic device called a gateway so the transaction can be processed in real time. The total cost of credit card processing includes all fees involved plus whatever percentage is charged by the merchant account provider.
Credit card processing does not only include the cost of processing the transaction, but also includes other costs such as monthly minimum fees and equipment costs. A merchant account typically requires that you pay a monthly fee in order to use it along with setup fees depending on which company you decide to work with. However, this fee can sometimes be waived if you agree to accept a percentage of each transaction instead.
A specific product or service is provided at the time of sale and then payment is collected by swiping the card through an electronic device called a terminal. The amount is subtracted from your available balance immediately after the order has been processed, assuming it does not result in a decline or hold. The total cost of the transaction includes all fees involved plus whatever percentage is charged by the merchant account provider can be done through a variety of different means such as phone, online, and in person depending on what type of business you run. Phone transactions are typically processed through a voice authorization system and can be conducted both in person and over the phone.
Online transactions, which is the most common type of credit card processing, can take place through a server or through an acquiring bank using an application service provider. In-person credit card processing involves swiping your card through a terminal and keying in your PIN number for authorization purposes.
