Factors to Think About in Finding Vendors for Credit Card Processing
Learn about the various issues you need to carefully consider when choosing a vendor.
There are several things to mull over prior to selecting vendors to take care of processing your credit card. Payment structure is quite complex. The business owner should also have a good relationship with merchant banks. Likewise, processing usually entails an assortment of software and hardware as well as advanced technologies.
Complicated and Confusing
The processing of credit cards is intricate and at the same time, puzzling. You need to figure out how the entire system works. To achieve this, it is important to know the participants and their respective services along with fees for processing transactions.
Participants refer to customers; merchants; issuer of credit cards; payment gateways; card interchange; processors of acquiring banks; and, merchants’ acquiring banks. All of them interrelate for every purchase and transactions are approved within an average of two to three seconds.
The credit card processor provides the business person with the merchant account. It is used to obtain funds from card sales. You are obliged to make payments to your processor for this particular service.
Steps in Processing
These are the stages in credit card processing that you should be aware of:
Collection and Recording of Information – Gather all required data or details from the customer and pass this on to the service for processing through manual or electronic means. It can be done by swiping the card or encoding it on an online platform.
Payment Authorization – The payment information is transmitted electronically after it is entered to the processor. It is the obligation of processors to check if the account is active and authorize the payment. There must be sufficient credit limit to cover the cost. The processing expert manages the electronic transfer of funds for said transactions.
Deposit of Funds to Bank Accounts – Payment processors for credit cards deposit the money to merchant bank accounts. Then, this money is remitted to the bank account controlled by your company. Charges are taken from the merchant account. For payments made through the Internet, this should be allowed by the merchant account and capable of integrating processing to your website.
Need for Security
Acceptance of credit card payments requires signing of an agreement that conforms to the so-called Payment Card Industry Security Standards. This is widely known as the PCI Standards. Violation of this security measure will mean hefty fines as well as loss of privilege to receive credit card payment. Use of the online or terminal payment platform call for a less number of security measure since the payment providers handle the card information. On the contrary, you are mandated to record and implement procedures in handling and getting rid of imprinter slips if you use card imprinters.
Even then, companies that adhere to these standards can still suffer from data breaches of credit cards. That is why some organizations opt for cyber insurance coverage although it does not protect you from data infringement. It is only a technique that can be used after a contravention takes place.