Why does my business need credit card processing?
Credit card processing is the process by which business owners like you accept payments from customers using credit cards. When a customer makes a purchase with a credit card, the merchant submits the transaction to their credit card processor, which then sends it to the customer's credit card company for authorization. If the transaction is approved, the credit card company sends an approval code back to the processor, who then deposits the funds from the transaction into the merchant's bank account. This entire process typically takes just a few seconds.
Here are the detailed steps that happen behind the scenes:
- The customer presents their credit card to the merchant.
- The merchant uses a card reader or point-of-sale (POS) system to capture the credit card information.
- The merchant's payment processor sends the transaction information to the credit card network (e.g. Visa or Mastercard) for authorization.
- The credit card network sends the transaction information to the customer's issuing bank for approval.
- The issuing bank approves or declines the transaction and sends a response back to the credit card network.
- The credit card network sends the response back to the merchant's payment processor.
- The payment processor communicates the transaction outcome to the merchant, who can then complete the sale or refund the customer if the transaction was declined.
- The payment processor settles the transaction with the merchant's bank, taking a small fee for their services.
Overall, credit card processing is a complex system that involves multiple parties and technology to facilitate the acceptance of credit card payments. It is a crucial component of electronic commerce, allowing merchants to offer customers a convenient and secure way to pay for goods and services.
Oftentimes, merchants go with the first option for credit card processing and never really shop around for the best rates. Did you go with your bank? Did you go with Square, Paypal, etc.? Chances are you received retail rates. Talk to our team at firstname.lastname@example.org to get the best rate and exactly the same products and services as what you have now.