Whether you close your sales over the internet or in stores or in a mixture of both, you may soon start considering the use of credit card processing in order to help your customers pay you faster.

Having credit card processing is a decision that may be easy for you to make. What makes it more complicated is selecting a merchant provider of accounting because this decision may have greater repercussions in your bottom line.

Credit card processing once started is not a complex process. However, it is important to keep in mind the additional costs that this service implies like: fees, rates, limits and customer care. The latter should not be disregarded because it is a crucial one and when not included in the decision making can give business owners many headaches.

Here we will try to explain step by steps all the implications to credit card processing in order to understand how it works.

The first step is when a customer makes a purchase using his or her credit card, either from our store of your website.

The credit card processing software will obtain the information regarding the amount of the sale and the data of the customer that performed it. This information is sent to the acquisition bank.

An authorization is later requested by the acquisition bank from the one emitting the card. Once it is accepted, the first one will process the transaction and will request yet another approval.

The credit card processing software will allow you to review the transaction and send a confirmation to the acquiring bank.

The next step is receiving the funds from the financial institution that issued the card to the customer.

The funds are then transferred from the customers’ account to your business account.

And this is how credit card processing works. Now, it is needless to say all parties involved in this process have a cost advantage. Here are the primary fees to consider:

A one-time fee is charged in order to get started. The Transaction fee which the merchant pays for every transaction. There is also a Discount rate which is a flat percentage charged to the merchant for every transaction. Lastly, there is a Rate of return of charge which is a percentage of monthly sales “held” in reserve to offset the cost of fraudulent transactions

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