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It's
a fact that businesses offering credit cards as a payment
option are more likely to have higher revenues than
businesses that don't. So, if you're a business owner and
you are thinking of jumping on this bandwagon to higher
profits, understanding the process before you make any
decisions would be beneficial. Knowing just how your
customer's charges go from point A, your store or business,
to point B, your bank account can give you tips as to what
to look for in a processing company.
The Process
This process is basically a series of steps: initiating,
authorizing, completing the transaction, and lastly,
receiving your funds. Let's start at the beginning.
The process begins when you accept the card from the
consumer. The next step is to verify that the card is active
and the amount of the purchase is within the cardholder's
available credit limit. How that verification is done
depends upon the equipment that is available to you, and how
you interact with your customer.
If you own a business in which the customer can present you
with the actual card, like stores and restaurants, then you
can physically take the card and swipe it through your card
terminal. If you own a business that is online, your
customer enters their own information into your form. Mail
order and call center-based businesses usually have
computer-based terminals for entering charge card data.
The second step is authorization. The key for reducing any
problems during the initial phase is to make sure you are
using technology that allows for real-time authorizations.
This software will immediately send the card number and
amount to the card processor and the processor immediately
approves or denies the sale. This is critical for cutting
back on charge-backs and card errors.
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Credit Card Information
»Credit Card
Information
»Types
of Credit Cards I
»Types
of Credit Cards II
»Various
Features
»APR
Explained
»Choosing
a Credit Card
»Credit History
»What
is a Credit Report
»Credit
Card Numbers
»Expiration
Date
»Application
Process
What to do When...
»Your
Credit Card is Stolen
»Your
Application was rejected
»You
Have no Credit History
»You have Credit
Card Debt
»You have to pay your bill
Business Owners Section
»How
Credit Cards are Processed
»Accepting
payments online
»Accepting
payments offline
»Protecting
Your Business From Fraud |
Third, you will need to
complete the transaction. At the end of the business day,
any credit card charges will need to be processed. This
procedure is called batching and can be done either by hand
or on your credit card terminal. Once this is done, the
credit card processor will send each credit card company
represented in the batch the transaction that took place.
Once this is done, each credit card company will debit the
cardholder's account. This ends this part of the transaction
and all that is left is for the monies to be transferred
into your account. This usually takes place pretty quickly,
often within two to four business days.
Safety Issues
Since the process can take a few days to complete, knowing
that your money is safe and will actually be credited to
your account is a key concern. Many credit card processing
companies have protection policies in place that will
absolve you of any responsibility should you be a victim of
credit card fraud as long as you followed their
authorization procedures 100%. Before you decide on which
processing company to go with, check out their safety
policies, particularly if you are an Internet company. You
will want as much protection as you can get.♦
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