Setting Up Merchant Accounts For Credit Card Processing
Credit cards are the most widely used form of payment in this exponentially growing world. Everything that relates to finance does include credit cards. The plastic money with infinite applications has impacted merchant accounts completely. Right from the moment a credit card is swiped at a merchant’s end to completion of the transaction, the payment processor plays a vital role in it. Setting up a merchant account has two most vital involvements, one is the bank which sets up the account for business and another one is payment processor which manages the complete transaction of the merchant.
Why A Merchant Account?
The main purpose of having a merchant account is to accept payments from customers, mainly in electronic form i.e. credit cards and debit cards. Merchant accounts act like safe deposits for all forms of payments for the sale that is made by the merchant. With the ever advancing technological era, merchant accounts are most important for online retailers and merchants. The merchant needs to have a good credit history and better credit ranking in order to have a merchant account. If the credit score isn’t good, there are options to get associated with independent credit card processing companies. Generally, the merchant account is set up with the bank with which the merchant does the business. Whether it be a dedicated merchant account or an aggregate merchant account, payment gateway providers and payment processors come up with different plans of service charges depending upon the volume of your sales.
Need Of A Payment Processor
Now the question arises, why do we need a third party apart from the merchant and the bank for credit card processing? A payment processor is the only link between the merchant using the credit cards for payments and the bank having the merchant account. Payment processor works in the background & abridges the gap between the two and facilitates the smooth and successful completion of the transaction. The process of transactions using a credit card does include different stages. The moment a card is swiped at the merchant end, the processor communicates with the card provider and the linked bank for authorization of the transaction and once the confirmation/negation is received by the processor, it completes the transaction on behalf of the merchant and the amount is transferred to the merchant account. As this process sounds tedious, it must be prompt as a flash of seconds in order to provide best-in-class services to the customer and for ease of the merchant.
Which Is The Right Payment Processor For Your Business?
Depending on the industry segment and general payment methods, one can opt for internet merchant account for online payments and brick-and-mortar merchant account for other payments methods. For online payment processing services, the merchant must choose the payment processor wisely keeping in mind the facts, fee structures, and service quality. The right payment processor gives core strength to your online payments and they handle the complete online payment process in coordination with payment gateways, card providers, and the related bank, providing a hassle free & quick service to the merchants.
Pre-Authorization – Important Feature
Pre-Authorization is an amazing feature that helps merchants reduce the risk by requesting the settlement and capture of a transaction after the verification.
The Final Conclusion
Whether you are an online retailer or an online merchant, you must opt for a merchant account depending on your credit ratings and collaborate with the best suitable payment processor for your business. If your credit score is not good and your customers are from the US then you can also use physical check processing and echeck gateways. The online market has unlimited growth possibilities and to tap the maximum benefit out of it, you must choose wisely. You can save time and money, with a reliable and secure payment processor and a befitting merchant account for a business with the bank.