Merchant Credit Card
Services
Just The Facts:
If you run a retail storefront, you need to accept credit cards. According to the U.S. government, nearly 75-percent of American families have one or more credit cards and many consider them their preferred method of payment. The fact is, if you don't accept credit cards your customers will likely go to someone who can APPLY NOW!!
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To accomplish online payment processing, either you or your third party service must have two things:
· A Merchant Account
· Access to a payment gateway
Now lets just take a closer look at how each one of these is accomplished.
PART 1
Online Payment Processing and...
THE MERCHANT ACCOUNT
To accept credit cards (THE web currency) online, you'll need an internet merchant account.
At the barest minimum, your merchant account must accept payments from Visa and Mastercard. It is almost unheard of for a merchant account not to, so this should be no big deal (emphasis on should). If they also honor American Express, Discover, and other, smaller card services, so much the better for your online payment processing success.
There are basically two places to go for internet merchant accounts -- banks and providers. Which is the best choice for you?
Regardless of where it comes from, there's a dizzying array of fees associated with online payment processing and any internet merchant account. The most common are application fees, discount rates, transaction fees, monthly fees, and gateway fees.
Incidentally, if you already have a merchant account for your physical store, don't assume you won't need another one. Typically, a separate Internet merchant account will be required for online payment processing (which will, unfortunately, have higher fees).
With your Internet merchant account in place, you are almost ready to begin accepting credit cards in that magical world known as "real-time." Real-time online payment processing literally means your customers credit card is either authorized or declined, in a matter of seconds, while your customer waits.
The great value of real-time online payment processing to you, the merchant, is speed and efficiency. You touch nothing and problems are resolved (or at least caught) immediately.
PART 2
Online Payment Processing and...
THE PAYMENT GATEWAY
To accomplish online payment processing in real-time, you will need to use a payment gateway. Your site links to the provider of the payment gateway through a secure (encrypted) server.
The best way to think of the payment gateways is as plumbing (now there's a statement you can't make too often!). They are secure pipelines (literally off-the-internet land lines) that link to the banking network. Obviously, this network must be kept extremely secure and be accessed extremely quickly--thus the special land lines.
You will use a payment gateway for two critical online payment processing actions--authorization and settlement.
Authorization is simply checking that everything gels. Is the account in good standing? Is the card reported stolen? etc.
If it all looks good, a portion of the customers credit line is set aside and an approval is sent back through the payment gateway.
Please note that nothing is deducted from the customers account at this time. You CANNOT capture funds before the product is shipped. Also note that online payment processing authorization does not ensure that the card is not stolen.
Once you've received the authorization, you're ready to ship the product.
Settlement is the actual act of capturing funds and transferring them to your bank account. Typically, this will be done once a day (usually toward the end of the day) for all orders filled that day.
Once you have settled accounts, you have completed online payment processing.
Simple, right?
This brief overview of online payment processing is not meant to be a complete education on the subject. It is hoped, however, that it helps give you a big picture view of what can be a very complicated and misunderstood topic.
As always, if you are shopping for online payment processing solutions, my advice to you is TAKE YOUR TIME.
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702-731-6665 or 1-800-800-6842
Las Vegas-Henderson, Nevada
