Are you looking for a credit card processor for your new endeavour? Opening a business bank account for your new endeavour doesn’t just serve to legitimize your business idea and make your real business. It’s also a vital consideration for your taxes.
If we actually look at it, the world of payment processing is huge and growing continually as new technologies and payment avenues expand. Customers are no longer confined to just paying cash or credit. Customers are defining their purchasing preferences not only by the products that your store sells but also the type of payments you accept, from using debit cards to mobile payment apps. That’s the real reason why selecting the right credit card processor can have a significant impact on the number of sales you make and long-term customers you win over.
Accepting credit cards and processing those payments is still complicated, whether you need credit card payment processing on the street or online. This is because of the sheer number of moving parts inherent in this aspect of merchant services and mobile payment processing. It’s also because of all of the various entities involved. Also since rates and contracts vary by customer, it’s difficult to make a direct comparison between these providers.
Payment Card Industry Compliance and Support
Merchants must adhere to PCI DSS that’s Payment Card Industry Data Security Standard and most providers include PCI compliance as a basic feature of their services. However, it’s also very important to note that this isn’t a government regulation. It’s actually overseen by mostly a private, self-funded organization. Some processors charge a compliance fee (ranging from $20 to hundreds), even though they don’t even help the merchant become compliant. Using aggregators helpful because it is responsible for maintaining its merchant account, including compliance overhead.
Here are a few factors you need to look into:
- Which Credit Card Processor Is for You:
Looking for the best processor is a lot like looking for insurance. An ethical agent will find a plan that suits your needs. Each business has different requirements. Every size won’t fit the same person. So look for an option that suits you the best.
In case if you’re a very small business doesn’t mean your credit card processing options are limited. It all depends on your type of business, how and where you intend to conduct it, and how much streamlining you’ll need in order to make running it smoother and better.
- Processing fees:
Money is always a factor we need to look into. Figuring out the costs of accepting credit cards can seem like rocket science, but it may not be. There are fees involved, ranging from percentages to actual dollar amounts that vary based on the type of transaction or processor.
Here are a few types of fees:
Minimum monthly fee: This fee might be charged to merchants who don’t reach their transactional total for the month or the year
Transaction fee: A fixed amount charged per transaction
Payment gateway fee: This is Similar to terminal fees, these fees apply to e-commerce businesses to process customers’ credit card information.
Statement fee: Printing and mailing cost for card statements
How card processing works:
In just a matter of a few seconds, your terminal passes the transaction information to a processor, and then through the card network to the issuing bank for approval. The issuing bank sends an authorization back through the card network to your processor before it finally ends up back at your terminal or software.
So the first step here is authorization. And authorizations must be settled before sales can be deposited into your business’s bank account. Credit card transaction happens in a two-stage process i.e, authorization and settlement. It is important to note that there are different fees incurred at each stage. Failure or partial failure of the payment in either step can result in increased costs and/or credit card sales not being deposited.
Key Players of credit card Processing:
Let’s take a look at each of the main players involved in authorizing and settling a credit card transaction.
Most of us have credit and debit card so we are aware of the role of a cardholder. A cardholder is someone who obtains a bank card (credit or debit) from a bank. After that present that card to merchants as payment for goods or services.
A merchant is any kind of business that sells goods or services. We are only talking about merchants that accept cards as a form of payment. A merchant is any business that maintains a merchant account that enables them to accept credit or debit cards as payment from customers for goods or services provided.
An acquiring bank(merchant’s bank) is a registered member of the card associations like Visa, MasterCard and so on. An acquiring bank is often referred to as a merchant bank because they contract with merchants to create and maintain accounts it’s called merchant accounts that allow the business to accept credit and debit cards. Merchant’s bank provides merchants with equipment and software to accept cards. They also provide customer service and other necessary aspects involved in card acceptance. The merchants bank also deposits funds from credit card sales into a merchant’s account.
As you’ve probably guessed, an issuing bank or cardholder bank)issues credit cards to consumers. The issuing bank is also a member of the card associations like Visa and MasterCard and so on.
Issuing banks pay merchant’s bank for purchases that their cardholders make. After that, It is the cardholder’s responsibility to repay their issuing bank under the terms of their credit card agreement if they fail to pay there might be charges applicable.
Card Associations (Visa and MasterCard):
Visa and MasterCard are not banks but a brand and they do not issue credit cards or merchant accounts. They act as a clearinghouse for their respective card brand.
The primary responsibilities of the Card Association are to govern the members of their associations, qualification guidelines, act as the arbiter between issuing and merchant banks. Also, it maintains and improves the card network and its brand, and, also make a profit. Moreover what’s even more important now is that Visa and MasterCard are public companies.
Looking for a payment processing company? We at iPayTotal can help you set up with the lowest rates and no hassles for your high risk businesses for your high risk merchant account. So why wait? Call us now : +44 800 776 5988