Accepting credit cards to your customers is more complicated than it seems. With so many banks and merchants, offering solutions providers processing credit card it helps to have an overview of the various transaction fees, discount rates and technologies to consider.
Whether you conduct business online, offline or both you will at some point consider accepting credit card payments from your customers. The decision to allow credit card payments can be simple; however, the selection of a high-risk merchant services provider is complicated and can have a real impact on your business not to mention your bottom line.
Unfortunately, not all merchant accounts are created equal. You will soon learn that providers have different approaches to the rates, fees, limits, not to mention customer service - and find the perfect match for your business is essential. The rest of this guide shows the process and considerations that will allow you to find the right solution.
How it works processing credit card
Without going into too much detail and finding all possible exceptions, this is what happens when a credit card is processed…
- The merchant processes a card with a retail outlet or through software should be online.
- Transmission of data (card information, sales amount) to the bank where the "acquisition" is made.
- Acquiring bank requests authorization to the bank of the "card-issuing"
- If accepted, the acquisition of the bank transaction is processed and sent back for approval
- The merchant reviews the transactions and transmits confirmation of the acquisition of bank deposit.
- Acquiring bank then requests and receives funds from the bank that issued the card.
- Acquiring bank then deposits funds into the merchant's account.
Needless to say, all parties involved in this process have a cost benefit. Here are the primary fees to consider…
- Handling fee is charged once to get going
- Rate transaction fee - merchant pays a fee for each transaction
- Discount rate – Flat percentage charged to merchant for every transaction
- Chargeback rate - rate of monthly sales "it held" in reserve to offset the cost of fraudulent transactions
- Chargeback fee - there is often a fee for charge - backs
What ask suppliers to evaluate their merchant services?
In order to get an offshore merchant account from provider merchant services, it is important to understand the different ways you can make money.
- New implementation of client and application rates
- The sale of software and processing equipment
- Participate in the payment transaction that occurs with each customer transaction
With this in mind, the evaluation of suppliers is sure to consider how they make their money and reasonable way to their products and services. Also, be careful to inquire about the following:
- Am I required to contribute to a reservation? What percentage of sales?
- How will it affect my credit rating requirement cash reserve?
- Will my credit rating affect any of my fees?
- What is my share of monthly minimum processing?
- How could rates you're quoting me change after the application process?
- Can my rate equipped change as a result of the application process?
- What if process a foreign card?
- What if I am unable to process my transactions daily?
- What happens if I go over my daily limit?
- What happens if I have an unusually large number of overdue charges?
To know more read this: 20 Interesting Facts and Secrets About Bitcoin.