Credit Card Processing

Starting a new business? Learn about opening a merchant account and credit card processing.

Millions of businesses accept credit cards for the convenience of their customers and clients. Credit cards have been as natural a way to conduct business as cash and checks for decades.

In order to start accepting major cards for payment, a business has to open a merchant account. Whether the business is a physical location or online, a bank can often help get an entity set up.

It all starts with credit card processing equipment. This is usually nothing more than a small machine or terminal that connects with a plug into a wall socket. Each merchant is provided with a merchant number and instructions on how to process monetary transactions.

The transactions for the merchant account service can be processed in two different ways. The first way is to slide the credit card through a thin slot in the machine. The machine will then read the bar code and the usually sixteen digit credit card number. The second way is for the operator to physically press in the card numbers.

With either method, the financial transaction will proceed. Many businesses take orders over the phone, or by having an online form filled in with the credit card numbers.

These businesses don’t have access to the card itself, so they must use the card numbers provided and access the card with the pressing method. Also, some businesses can electronically transfer credit card funds into their account without pressing a terminal.

An online business merchant accountoften collects the bulk of a company’s revenue. A small amount of business can be conducted by sending a physical check through the mail to the business’s address, but the majority of an online business’s income comes from credit and debit cards.

Internet credit card processing is a very fast and reliable method of payment. It’s also usually very safe and accurate. It’s difficult to process the wrong card once the correct numbers are entered into the terminal.

Using a merchant account service is very convenient for customers. Most doctors’ offices also accept credit cards via a merchant account, so patients can freely pay with this method as well.

For the privilege of using their credit cards, each card company charges a small fee for processing, depending on the company. This can be a per-transaction fee, or a monthly use fee. It’s not very expensive to process each transaction, but it’s certainly not free.

If a business continues to operate according to the rules of service, including paying its fees in a timely fashion, then the card company will continue to allow the business to prosper from using the machine.

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