A Simple Guideline to Merchant Services
Every entrepreneur knows that businesses must generate enough profit to sustain operations and provide a reasonable income for the owners. In achieving these goals, owners must plan ways to increase income and decrease expenses. Merchant accounts with the merchant service industry provide many ways to optimize business operations.
Processing Credit and Debit Cards
Accepting credit cards is essential for online, telephone and other orders when the buyer is not present.
When customers are present, merchants need terminals to collect the data by swiping the card through the terminal.
Verifying, Recording and Payment Cycle
Credit card data is electronically transmitted to a processor for verification and approval.
When information is verified, the customer’s card is charged for the transaction amount.
Periodically, the merchant collects the card sales and sends them to the card company to be collected.
in one or two days, the card company transfers the payment to the merchant’s account.
Types of Terminals
Dial-up Terminals – A telephone line directly connects the merchant’s terminal to the processor. The card is swiped through the processing device attached to the telephone, and data is transmitted to the processing company.
IP Terminals – Merchants use the Internet to transmit data to processing companies. The merchants accounts are linked to the Internet, and customers choose their products. Credit card information is entered and transmitted to the processor for verification.
Wireless – Traveling merchants benefit from these terminals that transmit data wirelessly and over the internet .
Buy or Lease Equipment
Merchants may buy or lease terminals. Since terminal owners are responsible for repairs, merchants who lease equipment have slightly higher payments due to maintenance agreements.
Not All Credit Cards are Accepted
Since credit card companies have different criteria, merchants select the cards they will accept. Some credit card companies require merchants to have a minimum monthly sales amount. When qualified, merchants decide if the card is worth the cost. Merchants accept credit cards as a customer convenience.
Merchant Services Cash Advance
One benefit of merchant accounts is cash advances. When cash flow problems occur, merchant service will buy credit card receivables at a discount. Merchants receive cash and the merchant service company collects payments from the credit card company.
Although income is less, merchants have cash available and the repayment is automatic. Since the interest has been paid, merchants can use the cash for paying other liabilities or purchasing inexpensive equipment.
Automated Clearing House
The merchant services industry also acts as an automated clearing house. These service include direct deposit, payroll, direct debit, mortgage loans and other financial transactions.
Merchant service companies have e-commerce applications that verify credit cards. These gateways use encryption to transmit data between merchant and customer and between merchant and payment processor.
Selecting a Merchant Service Provider
Use the Internet - An Internet search will reveal providers and their reviews. The Better Business Bureau website is an excellent place to find complaints about the industry.
Interview Other Merchants - Satisfied customers keep businesses profitable.
Package Bundles- Selecting several features may qualify for a discount.
Look for Quality at the Best Price.