The Merchant Account Processor

To process card payments, as a business owner you must be equipped with a credit card terminal or a merchant account processor. This indispensable electronic equipment accepts swipe and manual key-enter of vital information needed in credit card transactions. Related transactions such as gift cards and check verification are also accepted in this equipment.

So how does this equipment works? What are its vital parts? Merchant account processor or credit card terminal needs a power supply to work but there are also terminals that may use batteries in case of power outage. They may either connect to a telephone line or to the Internet but new models can now also connect through a mobile network which enables a wireless transaction. The equipment is consists of a modem, magnetic stripe reader, keypad, printer, power supply and memory card.

Another vital information you need to know is the method of credit processing. A merchant account provider has the capacity to trade a means to process credit cards for business owners. Processing of credit cards is done electronically to an acquiring bank. Verifications of the status of credit card account are automatically known when it is connected through the network.

The actual billing of the charge is summed up at the end of each day batch. An authorization fee is the most prevalent daily charge which is sent to the bank that issued the card even the transaction is declined. Another daily charge is the batch fee. Batching is done when the business owner sends the completed transactions for the day to the bank acquiring the payment.

A merchant account processor can be acquired by the business owner through actual purchase, rent, lease or this may be also offered free in exchange for contractual obligations from a merchant processor. A thorough review of contractual obligation should be made by the business owner before deciding on a merchant processor and a credit card terminal. A business owner should be very cautious on the terms and conditions set by the merchant provider. Everything that had been discussed verbally should be the same thing that will stipulate in the contractual agreement.

As a rule, you should make sure that you are getting the equal compensation for the costs of your merchant account processor and the services it entails. You should always clarify vague terms and conditions in the contractual agreement. A common additional cost that applies is the wide range of memory capacities, attachments and features such as printers and debit cards pinpads. Buy only what your business requires and don’t be lured by unnecessary features.

There are additional services merchant account provider offers in relation with the credit card terminal such as the automated response unit (ARU). This unit enables manual keyed entry and succeeding transactions of a credit card thru a mobile or land-line telephone. Another service is the payment gateway which is equivalent of a physical point-of-sale (POS) terminal. Payment gateway is an e-commerce service which approves payments for online retailers and e-businesses.

While acquiring a merchant account processor is costly and entails of additional requirements, the service pay off as it safeguard businesses to accept multiple currencies and various payment types. Another advantage is being able to receive purchasing cards which is a growing trend among corporations.

Being able to accept multiple modes of payments of course means, more gain in your business.