If you own a store, a restaurant, a booth or kiosk, accepting credit payment is a great way to boost your customer sales. You don’t need to own a big company or a big business in order to accept credit card payments. Even as a small business owner, you can apply for a merchant account.
One form of merchant account is called retail credit card processing which means customers who personally come to your shop to purchase can pay with their credit cards rather than paying in cash. In this article, let’s talk about basic facts of retail credit card merchant processing that you should know.
How Retail Credit Card Merchant Processing Works
What is the process involved in a retail credit card payments? First, the retailer must apply for a merchant account from a bank, a credit card company, or a third-party processing company.
Once approved, the seller must acquire a credit card terminal where the cards will be swiped. A business owner has the option to buy the terminal or lease the equipment, depending on the merchant account provider’s policies.
The credit card terminal reads information from the card which is electronically sent to the credit card merchant processing company. The processor will check if the information is accurate and if the bill can be charged to the cardholder’s account. The processor will send back a message to the terminal whether the transaction is declined or approved. All data are sent electronically and the process happens very quickly, usually within 15 seconds or less than 30 seconds.
If the transaction is approved, the final processing steps will take place. The retailer has the option to send each transaction to the processing company or to send credit card transactions by “batch”. If the seller chooses to send in batch, all credit card payments received in one day can be sent at closing hour.
If there is no problem with the credit card account, the bank or credit card issuer will deposit the payment to the merchant’s account. The process usually takes no more than 2 business days from the time the transaction has been made. In most cases, the credit card merchant processing company will hold a certain “fee”, in case the customer disputes the purchase or demands for a charge back.
Retail Credit Card Merchant Processing Tips
To avoid unnecessary problems, consider the following tips:
Choose an expert credit card processing company. Some banks may offer merchant accounts but not all specialize in credit card merchant processing. It’s better to choose an expert to be sure that you can enjoy the best that technology has to offer.
Understand all processing fees. The exact fees may vary from one processing company to another. Carefully examine the fine print to understand all possible fees you may incur and don’t hesitate to ask if there are fees or conditions that seem unclear.
Watch out for hidden fees. Some processors may prove to be unreliable once you tried their service. In case you want to switch to another processor, you might be charged with an expensive cancellation fee. You need to do research and do comparison before choosing a credit card processing partner.
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Melanie James has spent the last 14 years working with businesses to implement quick, effective and inexpensive changes to their businesses to increase productivity and their bottom line.