Most businesses rely on credit card processors to handle the details of accepting credit and debit cards. Credit card processing is a critical service, and it ensures that customers can simply and quickly checkout. 

How Does Credit Card Processing Work

  • First, a customer presents their credit card information for payment. 
  • In-store, consumers swipe magnetic stripe cards, dip EMV chip cards, tap contactless cards, and use digital wallets like Apply Pay mobile payments solution with their smartphones. 
  • Online, consumers present credit and debit cards through websites and apps via payment gateways.
  • For phone orders, a virtual terminal offers secure credit card processing with a personal computer. 
  • The payment information is then sent to the processor, which communicates with the customer's bank through the relevant card networks (such as Visa or Mastercard). The customer's bank approves or rejects the transaction. Approval is based on detailed verification including validity of card number, sufficient available funds, and other factors.
  • That approval is sent back through to your payment processor and then finally back to your terminal or credit card reader. Approved transactions are clubbed into batches for settlement at the end of each business day. Customers have to pay charges for the transactions, with deposits then made into your merchant bank account.

 

How To Evaluate Credit Card Processors?

Credit card processing is a complex service involving emerging technologies, multiple moving parts, payment networks, regulatory bodies, and financial institutions. Credit card processors often vary in quality like any service involving that level of complexity. 

When evaluating potential credit card processors, ask questions about these 4 critical areas where the quality of payment processing matters most to your business. 

  • Strong uptime record
  • Fair and transparent rate structure
  • Transaction speed
  • Access to helpful customer support

How Is Your Transaction Speed?

Customers feel convenient to pay with credit cards and want the payment also to be fast. So, you have to choose a processor that is already proven to process a large volume of transactions safely, accurately, and quickly. Today, credit card processors usually complete transactions in under two seconds. Your credit card processor should also be safe, since credit card payments require a high level of safety. 

Choose Reliable Credit Card Processors

Payment system outages are very hard for businesses to face. A credit card processing outage implies that your business is as good as a shutdown. It is not only the downtime that is damaging. Customers turned away during an outage may view your business as untrustworthy and inconvenient. That is not good for businesses. 

Credit card processing outages are rare, but all credit card processing systems may have downtime. When you choose processors, you must check for the history of outages, and what they have done to reduce service interruptions. Reliable processors are endowed with features which help in uninterrupted and continuous work even when there is a network outage. For instance, they have redundant servers to prevent downtime during network outages. 

Transparent Rate Structure

The cost of the credit card processing service should be clear and straightforward. But, it can be complex, however. The rates and fees you will pay depend on many factors. They will start with the interchange category applicable to your business. The interchange pricing varies based on the risk factors of different types of businesses. The cost of interchange is set by the card brands and is the same for all processors. 

Customer Support 

As a business owner, you must have strong customer support in place with the credit card processor.  If anything goes wrong with the payments, then you should be able to call even at night time. All credit card processors do not offer a 24/7 support system. If your point of sale is mission critical, then you should take up this kind of credit card processor. Leading processors will keep track of the call waiting times and the resolution scores. 

 

Conclusion

Businesses should choose the credit card processor carefully and in such a way that customers can pay anywhere, anytime, and anyway. 

 

FAQS Credit card processing

1:What is a credit card processing company called?

Credit card processors also called merchant service providers or acquiring service providers administer a service so that you can accept credit card payments at your business.

2:Who pays for credit card processing?

The vendor pays the credit card processing fees and not the consumer. Businesses can pay credit card processing fees to the buyer’s credit card issuer, to the payment processor company, and to their credit card network.