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Everything you need to know about credit card processing process

Everything you need to know about credit card processing process

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We have some good news for you. For years, it has been possible to get free credit card processing through the use of Square or other mobile credit card processors that link with your smartphone or tablet. This is great news if you are establishing a new business or selling on marketplaces such as eBay and Amazon. However, if your sales volume is high enough, you can’t always rely on free credit card processing. You need to get set up with the right merchant account that will enable you to accept all forms of payment for your business.

What is Credit Card Processing?

When a customer pays for something with their credit card, the issuer (Visa/MasterCard) pays the merchant for the purchase. Credit card processing is simply the term used for the technology and systems that make this possible. This can include a physical credit card terminal in your store or an online payment gateway that allows you to accept payments through your website.

How Does Credit Card Processing Work?

Credit card processing works by authorizing a purchase and then depositing the funds into the merchant’s account. The entire process is typically completed within a few days, although it can sometimes take longer if there are any issues with the transaction.

There are a few different ways that credit card processing can work:

  • Card present: This is when the customer physically presents their credit card to the merchant. The merchant then swipes the card through a credit card terminal, and the customer is prompted to enter their PIN or sign for the purchase.
  • Card not present: This is when the customer doesn’t present their credit card in person, such as when they are buying something online. In this case, the credit card information is submitted to the merchant, usually through an online payment gateway.
  • Card present with PIN: This is when the cardholder presents their credit card to the merchant at checkout but also needs to enter their PIN number in order for the purchase to go through. This is typically used for debit transactions. Kindly visit PDF to JPG.

What Are The Different Types of Credit Card Processing?

There are 4 main types of credit card processing:

  • Dedicated terminal (also known as offline) – A dedicated telecommunication line is created between the merchant’s location and the payment processor. The telecommunication line carries information in real-time to authorize, decline, or hold transactions. When a customer presents their card at the physical location, the system goes through a series of procedures to complete the transaction. Dedicated terminals are usually used for high-volume businesses such as retail stores and restaurants.
  • Virtual terminal – This is an online payment gateway that allows you to process credit cards with or without software on your own computer or mobile device. You enter your customer’s credit card information, purchase details, and account number online. Virtual terminals are usually most useful for small businesses that happen to be located away from the merchant’s physical store.
  • Mobile credit card processing – This is when you use a mobile device such as a smartphone or tablet to process credit cards. Mobile credit card readers are connected to the device via a dock or wireless connection, and they usually work with secure apps that allow you to take pictures of credit cards as well as process manual entry.
  • Internet processing – This is when you use an online payment gateway such as PayPal to accept payments from your customers. Online shopping carts are usually used for selling items online through your website, which is great for selling merchandise.

What Are The Benefits of Credit Card Processing?

Credit card processing has a number of benefits that make it an attractive option for many business owners:

  • 24/7 processing – This means that you can process credit cards anytime and anywhere to help grow your business by taking advantage of peak sales periods.
  • Fraud protection – Credit card processing offers a number of fraud protection measures, such as CVV verification and address verification, to help protect your business from fraudulent transactions.
  • Global acceptance – Visa and Mastercard are the two most widely accepted credit cards in the world, so you can rest assured that your customers will be able to find your business anywhere.
  • Convenience – Credit card processing allows customers to conveniently pay for the items that they want without having to carry cash around. Customers can also use a credit card if they don’t have enough money in their bank account, which is a great option for businesses because it helps them increase sales.
  • Automated billing: Credit card processing automatically bills your customers’ credit cards on a regular basis. This is often easier for customers, because it streamlines the billing process, and helps to avoid late payments due to forgetfulness.
  • High-security standards: When you process credit cards with a payment processor, you are required to meet all of the industry’s data security standards. This will help protect your business from fraud and ensure the safety of your customers’ data, which they expect when giving their personal information online.
  • PCI compliance: This means that you have to meet all of the industry’s standards for processing credit card transactions securely. It also requires your business to develop a security policy, install security software on your website, and have a professional perform a security assessment of your business at least every year.
  • 24/7 customer service: When you process credit cards, your customers can get in touch with you at any time to resolve problems regarding their credit card charges or payments. This ensures that they will be able to contact you for help if they have any issues with their transactions.

The Bottom Line

Credit card processing is an important part of running a successful business, and it offers a number of benefits that can help your business grow. By choosing a reputable payment processor, you can rest assured that your customers will be able to pay for the items they want in a safe and convenient manner.

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