Everything You Need to Know About Merchant Processing
Aug 18, 2020
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Today we will talk with you about a trading account and everything you need to know about it.
About trading account
If you have your own business, then you are faced with the problem of accepting payments from customers and receiving transactions on the account. A merchant account is needed to receive payment in various ways, physically accept customer payments, and receive transactions.
Usually, in order to choose a trading account, you need to answer a number of questions, such as:
- how trading services work: hidden processes that are needed to receive and send payments;
- what hardware and software is used;
- which companies are involved in processing payments;
- pricing: what indicators the price is composed of.
The work of merchant services mainly depends on what types of payments you accept, the method of receiving payments, which payment processing company you work with.
The merchant service process begins when a customer gives you their credit card and ends when the transaction is authorized.
The provision of merchant services typically includes a card processing terminal and the software required to accept credit card payments through the terminal.
The hidden processes for the provision of trade services are as follows:
- you swipe the card through the terminal or enter card data into it;
- information from the terminal is checked at the client's bank before accepting or not accepting the request;
- if the client's financial institution confirms the information, you will be able to accept the payment.
Once the purchase is approved, the payment processing company takes its commission and deposits the rest of the funds into your trading account.
The specified process takes place within seconds, but it is completely controlled by the payment processing company.
To receive the amount, you can use a payment gateway, a payment card terminal, a point of sale system.
Payment systems are software that works with your website or online store and helps you accept and process amounts. You need a payment gateway if you accept online payments.
A payment card terminal is a physical device that a card is touched or inserted into to receive information. You need a terminal if you accept payments in person.
The point of sale system usually consists of technology and software. It can be used not only to receive payments, but also to manage daily sales and business processes.
Payment processing companies provide all of the financial services we discussed above.
Payment processing companies fall into two categories: merchant account providers and merchant service providers.
Merchant account providers provide the bank accounts required to accept credit card payments. You get an account from merchant account providers and they set up and operate the account.
Merchant service providers do not provide merchant accounts, but can combine multiple accounts into a single merchant account and then distribute funds to separate merchant accounts.
The price for the services of payment processing companies is made up of many factors. The final cost of trading services will depend on which provider you work with, what services you need and how you use them.
The total cost of services will include the cost of the hardware and software you are using and the credit card processing fees.
Service fees can be expressed in flat rate, interchange-plus, which includes exchange fees plus transaction fees, and tiered pricing.
Tags: Uncategorized, English