Many people have a tendency to think that credit card processing isn’t complicated. When it comes to small businesses and shops, there is a lot to consider when they accept credit card payments. Accepting credit card payments isn’t an easy task. There are issues such as the merchant service refund being approved, usage of technology, changing security protocols and so much more. These obstacles are insuperable. Nevertheless, small business owners aren’t in a complete pitfall. There are some basic things one needs to know about credit card processing to stay at speed.
1. Understanding the Working:
When you accept credit cards, you must understand how money is being moved and by whom it is being moved. It is essential to have some idea about what happens in the backend if any problem arises.
There are four main things in credit card processing:
- Merchant Bank: Merchant service refund is provided to facilitate transactions to bank accounts.
- Processors: The middleman which takes on the merchant service refund and routes the credit card information to the respective payment networks and accounts.
- Issuing Bank: This is the institution which issues credit cards to the customers.
- Card Brand: There are credit card brands like MasterCard, American Express, Discover and Visa.
2. Credit Card Processor:
Being a small business doesn’t mean that there is a limitation to your credit card processing options. It depends on the type of business, how and where the business is being executed. It also depends on how much streamlining is required in order to make the running of the business easier and simpler.
3. Data Security:
Small businesses should hold the same security and standards as big businesses. Regardless of the size of the business, security standards and measures should be high and in place.
4. Credit Card Processing Fees:
The process of understanding the costs of accepting credit cards is very complicated. There is a multitude of fees involved from percentages to the actual amount. These vary and changes between the type of transaction and processor. This fee is an important factor for small business owners who have concerns that their credit card processing costs can cut into their bottom-line. This is the reason why a few businesses require a minimum purchase amount to use a credit card for payment purposes. There are a few types of fees that businesses must pay attention to when they add up on a monthly basis. Statement fee, monthly minimum fee, transaction fee, and address verification service fee are a few of them.