Merchant Processing An Overview and Significance

Whether you have an online business or a regular brick
and mortar store, offering your customers the option to pay by card is crucial.
In fact, according to one study, 80% of customers may reverse their decision to
buy if they find that the merchant does not accept credit or debit card
payments. That’s a huge chunk of business to lose!

Hence you need merchant
processing
services and choosing the right service provider for the same is
crucial.

How Exactly Does
Merchant Processing Work

When a customer hits the ‘pay now’ or ‘buy’ button on
your website (or when you swipe the credit card in a physical store), an
authorization request is sent to your merchant processing service provider. The
provider then forwards the authorization request to the issuing bank or the
credit card association for approval, including in the request, relevant data
such as credit card number, expiry date, and CVV number. The concerned
authority then sends back the approval or rejection (decline) to the merchant
processor. According the response received, the merchant processing agent
conveys the message to your customer whether the transaction has been approved
(order confirmation) or declined (directed to try another payment method).

The payment for the transaction is deposited in your
merchant account, less the service charges of the merchant processing company.

All of this is automated, secure and occurs within
minutes (probably in less the time you have taken to read this).

Points to Consider While
Choosing a Merchant Processing Service Provider

The credit card processing industry is complex and
several merchants don’t have a clear idea as to how exactly it works. Add to it
the plethora of operators in the market, each claiming to be the best, the
choice become even more difficult.

Use the following pointers while selecting a merchant processing firm to partner
with.

 ·        
Does the Provider offer all the
Services you Need?

Not all merchant processing service providers are equal. And
your needs also differ. For instance, if you have an online business, you need
a provider with a payment gateway, virtual terminal and risk and fraud
management. Also, if they are using proprietary software, it has to be
compatible with your shopping cart.  In
case of offline stores, your requirements are different.  So choose a company that meets all your needs.

 ·        
What are the Service Charges

Though it is not recommended to always opt for the
‘cheapest’ service provider, cost is an important factor while considering merchant processing firms. More than
focusing on how much you are being charged, focus on what exactly you are being
charged for. Some companies do offer certain value added services at an extra
cost. If your service provider is upfront about all charges and can
satisfactorily answer all your queriesFeature Articles, it may still be worth paying the
(slightly) elevated service fees.

 Merchant processingservice is important
for businesses. Make sure you choose your provider wisely to make it work for
your business.

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