Processing Credit Card Payments

The world is now doing business on the internet. To beat the cut throat competition, merchant accounts and credit card processing services are a must. This is because more than 80% of online customers pay via credit cards. Those who fail to bank on the opportunity are sure to loose out sooner or later.

It isn’t just enough to get a merchant account with a bank or financial institution and start with credit card processing. Every online business owner must garner all possible information regarding credit card processing, rates and fees, how it is done etc. This article is an endeavor to help find out how credit card payments are processed.

First, let’s get acquainted with all three methods of processing credit card transactions: -

Virtual Terminal- You can use a virtual terminal to manually process mail and telephone credit card transactions, as well as issue credit, from any Internet connection in the world.

Simple Integration Method- allows you to link your web site to the system in order to accept credit card payments from customers in real-time with complete automation.

Advanced Integration Method- This is a little complex and requires custom programming. The idea is to ink more complex web sites with the transaction gateway server to carry out credit card transactions.

The most convenient method of processing credit card payments for small businesses is by using existing merchant accounts. This is the best option for businesses that have a brick and mortar storefront along with an e-commerce site. Another option is to hire a company to do the credit card processing for you. There are several such establishments that charge a fee of 4%-5%, per transaction. In addition, they have a minimum monthly charge that ranges from $20 to $50. This model is idyllic for existing businesses with a moderately large and regular volume of sales.

Third party companies have made a foray into credit card processing. They simply clear the credit card transaction using their merchant accounts and cut you a check for the transaction minus the transaction fee, which rarely exceeds 9%. You may receive the payment in your bank or receive a check. A few examples are CCNow, ClickBank, iBill, iFulfill, NetBanx, PayPal, Verotel and Verza. This alternative is best at the initial stages of business set up when the number of sales are not large enough to subscribe for a monthly minimum merchant account.

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