What is credit card processing?
The set of activities necessary to finalize payments made with a credit card in person, online, over the phone, or by mail is referred to as credit card processing.
Who is involved in credit card processing?
Credit card processing relies on the following businesses to securely record payments at the point of sale (POS).
Consumer.
The individual making the transaction, or the cardholder.
Merchant.
The person or company that is selling the goods or service that the customer is buying.
Gateway for making payments.
The technology that enables a merchant to communicate with a payment processor. A gateway typically integrates with both card-present (e.g., in-store purchases) and card-not-present (e.g., online or ecommerce) payment environments, captures payment details for customer transactions and routes them to a payment processor or the merchant bank, and sends the merchant a "approved" or "declined" message.
Processor of credit cards.
Also known as a "payment processor" in a broader sense. The entity that allows the merchant, the credit card network, and the cardholder's bank to communicate with one another. Payment Card Industry Data Security Standards compliance is the responsibility of both processors and merchants (PCI DSS). Some payment processors have their own payment gateways, while others, often the bigger processors, have payment gateway reseller agreements.
A network of cards.
"Credit card network" or "credit card brand" are other terms for the same thing. The customer's credit card brand, such as American Express, Visa, MasterCard, or Discover, is indicated here. The credit card networks are in charge of determining interchange and assessment fees, as well as PCI DSS requirements.
Issuing financial institution.
Also known as the "consumer bank" or "cardholder's bank." This is the financial institution that issues the customer's credit card. In the credit card processing cycle, one of the key tasks of the issuing bank is to evaluate if the cardholder's account has sufficient money to execute a transaction and to release those funds for settlement.
Bank that is acquiring.
The "commercial bank" is another name for it. The merchant's bank is where they keep their business cash and receive money from transactions. It can give card readers and equipment to the merchant so that he or she can take card payments. Additionally, the acquiring bank might act as a credit card processor.
The Best Merchant Services to Help You Collect Payments
According to research done by business technology firm, over 30 percent of small business consumers have been unable to complete a transaction in a physical store because "their method of payment was not accepted”. Despite the fact that not taking credit cards reduces revenue, many business owners are concerned about not being able to afford high payment processing rates.
Using a merchant services provider on a monthly basis may be expensive, which is why it's important to carefully consider your alternatives before making a decision. However, there are more than 1,000 credit processors in the world. So, which merchant services are the most appropriate for your company?
Connected.co is a company that specializes in high-risk payments. Our team's expertise ranges from establishing one of the earliest payment gateways on the Internet to installing some of the most cutting-edge fraud protection technologies available in the industry today. In addition to being CPP certified, we also have banking contacts that allow us to get you authorized when others cannot.
JW Epply has been a senior executive for over 10 years, during which time he has met and exceeded growth and revenue goals in exceedingly difficult verticals. Epply is recognized as an efficient, dynamic leader with a strong background in sales and sales process, management, and organizational strategy. He holds a Bachelor’s Degree in Organizational Management from the University of Wyoming, and is an accredited Certified Payments Professional (CPP) from the Electronic Transactions Association (ETA).