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With the growing use of credit and debit cards, businesses have begun a transition to merchant services providers and mobile payment processors. These payment systems allow businesses to easily give their customers multiple payment options.
If you want to accept credit or debit cards, you may consider implementing a merchant account services provider. This is typically a bank or other financial institution that provides a business with the tools it needs to accept credit and debit cards from consumers.
The merchant account services provider is the bridge between the business and the consumer’s payment method (credit card company or bank issuer). This ensures that the payment is processed and accurately withdrawn.
Although merchant account providers do cover all credit and debit card needs for a business, it is certainly not free. As a business owner, you will need to pay fees every month and per transaction.
Similarly to merchant service providers, mobile credit card processors have customers set up a merchant account to receive credit and debit card payments. With mobile processors, businesses can receive and process payments wirelessly.
Mobile credit card processors are best for merchants who want to accept their customers’ credit cards anytime, at any location. Some examples are small business owners, food trucks and street vendors. In addition, brick-and-mortar stores that want to provide the option of paying away from the cash register can make good use of mobile card processors.
Before we jump into the details of merchant service providers, let’s tackle the definition of “merchant account.”
If your business is planning to accept credit and debit card payments, you’ll need a place to receive the money. That’s where credit card merchant accounts come into play.
A merchant account is basically just a bank account that receives money from debit and credit card transactions.
Each time a card transaction occurs, the resulting payment gets transferred to a merchant account. The money can be funneled into a standard business account afterward, usually on a regular basis.
If your company does business both at a brick-and-mortar location and online, the merchant account for card-present transactions may be different than the one you use for online transactions (you’ll see more about that below). Regardless, due to the prevalence of credit and debit cards, virtually every modern business needs at least one merchant account.
When choosing a provider, you should consider many factors including the costs, how easily you will be approved, the equipment offered, and the types of customer service available. For businesses that mostly sell their products or services online, it will be necessary for the merchant services provider to include all of the Internet-based features, including virtual payment terminals and payment gateways.
When you open a merchant account, be sure that the provider offers the type of account you need to run your business.
The types of merchant accounts you can choose from include:
For consumers, the best way to avoid unnecessary hidden fees is to know everything about your credit card—take the time to read the fine print or ask your bank. Be aware if the shops you frequent are implementing the new swipe fee. And comply with the terms of your card – make all payments on time and avoid going over your credit limit.
Credit card fraud is a serious problem, and unfortunately online merchants are one of the most popular targets for fraudsters. It’s easier to be quick and remain anonymous while testing credit card numbers with online sites rather than brick-and-mortar, and many small businesses aren’t taking the precautions that larger ones do.
So what can you do to protect yourself? Here are some tips for preventing and tracking fraudulent credit card use on your website:
The rising popularity of digital wallets has raised new questions about how credit card payments are processed. Do digital wallet transactions count as Card Present transactions or Card Not Present? Learn the steps involved in credit card payment processing, and how digital wallets impact the way payments are made.
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