Details About Credit Card Processing Services
Credit cards were introduced in America in the 1920s
, when gasoline companies began issuing cards to their customers, limited solely to their gasoline purchases. Shortly after, large retail stores like Macys and Gimbles began issuing credit cards to their customers, and immediately saw increases in their market share and customer base. However, the first general purpose credit card came in 1950, when Diners Club began issuing cards accepted at multiple stores and suppliers. Credit card usage is highest in Western Europe and North America, particularly England, Canada and the United States.With the prevalence of credit cards in todays economies, having a merchant account with a trustworthy credit card processing service is imperative for virtually all business owners. Not offering customers the benefit of doing payments by credit card is a surefire way to watch your profits decline. With the current availability of credit card processing services, it would be foolish to lose business to a rival solely because they accept all forms of payment. Once a business begins to use a credit card processing service, the opportunity for growth increases exponentially.
Card Processing Methods
Most credit card transactions are transmitted by utilizing electronically authorization. There are three primary methods of presenting a credit card sale to your system; either the entire magnetic strip is verified by a credit card terminal with a swipe, a computer chip is read, or the information is logged into a credit card terminal or into a website.
Credit Card Terminal
A credit card terminal provides a merchant the capability to either swipe a credit cards information or enter the numbers manually. The terminal usually only works with credit cards, though it is common for gift cards to be swiped as well. After a card is swiped or the numbers are manually entered into a keypad, the credit card terminal interacts with the network to ensure authorization. The transaction is then stored on the machine. The electronic funds are either uploaded right to the merchant bank, or a polling service provider will reroute the information to the merchant bank.
Automated Response Unit
Also known as an ARU, this method provides a keyed entry which is followed by authorization of a credit card over a land-line or cellular phone. By utilizing an ARU, the merchant usually imprints the card with to produce a receipt and a copy for the merchant. Following that, the transaction is processed right over the phone.
Payment Gateway
A payment gateway is a service used in e-commerce. A payment gateway authorizes payments for e-businesses and online retailers. In most cases, the merchant account provider is a different business than the payment gateway. Two separate components usually encompass a payment gateway: first, the terminal permits a merchant to log on and manually enter credit card numbers or have the shopping-cart interact with the gateway to provide immediate processing.
Electronic devices have taken over other forms of payment processing. Initial techniques of payment processing are very out of date. Nowadays, any instance where a customer can swipe a card is preferred. Whenever practical, it is always optimal to swipe a credit card because the processing fees will be much lower and incidence of stolen credit card number fraud will be greatly reduced.
Merchant accounts are available to merchants by two basic methods; either directly by the processor or sponsoring bank or by an authorized agent of the bank that is additionally registered with major credit card organizations.
Procuring a credit card processing service will benefit your business in a number of ways. First is the overall convenience you will now provide to your customers. Our economy has greatly moved away from paper currency, and if your customers are purchasing predominantly with credit cards, it is only logical to be able to accept them.
Credit card processing also allows a business to accept sales around the clock. Sales no longer have to be tied directly to your stores hours of operation. This is even more important if a business has international customers or even domestic customers in different time zones. With credit card processing, you can open up your business to customers you've never had before.
In extremely competitive marketplaces any additional convenience that can be provided is a huge advantage. Customer service and of course product quality are integral to establishing and then maintaining a successful business, but providing your customers with fast, secure payment options can help to set your business apart.
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