Credit Card Processing

Other Considerations You Need To Make

When deciding whether or not your business will provide credit card processing, it is important to look at all the information in order to make a well-informed decision. Unfortunately, many small businesses are run off by the daunting task of trying to interpret the data for themselves and the idea of accepting credit card payments ends there. Perhaps the largest obstacle to understand is the fees that you, the merchant, are going to be responsible for.

What Are You Paying For and Why?

First, you need to understand that a merchant account provider allows you to process credit card transactions. When a credit card is used, the transaction proceeds between the merchant, the merchant provider, the credit card company, and the customer. In order to facilitate the exchange between all parties, the credit card processing service must provide the software, hardware, and service for the merchant. For this, a merchant account service provider will bill you in its own distinct way. Some bill per month or per transaction and some bill per month and per transaction. Some have contracts that stipulate terms, as well as sign-up and cancellation fees.

The credit card associations want card holders. In order to help get people to sign up, they offer benefits and perks. For each transaction, the card holder gets something for using that card. In some cases it’s a reward of points towards a plane ticket or gas price discounts. In other cases, the card holder may receive discounted rates at certain retail locations. Credit cards are also easily counterfeited and stolen so credit card companies maintain certain security standards. These security standards are commonly very comprehensive. That being said, none of these things are free. These services are paid for with each credit card payment.

Associated Fines and Penalties for Card Payment Solutions

If a customer disputes ever having made a purchase that appears on their statement, the credit card processor will investigate. If it is confirmed that the transaction happened without the card holders consent, there will be a refund to that customer’s account and a chargeback charged to the merchant. Chargebacks occur during a refund or disputed charge by the customer.

Some of the largest credit card processors in the world get together and form associations. These associations create committees to discuss issues and work on solutions: one such example being the EMV standard. EMV stands for Europay, MasterCard and Visa. These companies are attempting to do everything they can to help stop credit card fraud. With this initiative they have issued cards with a smart chip in them. This chip helps better guarantee authorized use of the card. As a merchant, you will need to make sure that your card readers are EMV compliant. In the event that this doesn’t happen by the deadline for EMV compliance, you, the merchant will be liable for any credit card fraud that is processed at your location.

There are some associations and even state governments that have passed laws regarding customer privacy. These standards include practices like performing routine security checks on your systems, limiting how much customer payment information is visible, and enforcing strict rules at your place of business regarding customer payment information privacy. These rules are in place to ensure that you are doing everything in your power to keep private payment information private. Again, failure to comply with these standards will also result in fines.