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Did you know that over 85% of purchases made online are paid for by credit cards? Or can sales increase up to four times when credit cards are accepted? If your business is still insisting on old fashioned checks, or worse, cash, you can put it up as a museum exhibit! Getting a credit card merchant account is one of the first things businesses hoping to compete do.
If you’ve never heard of a credit card merchant account or have no clue how to get one, don’t worry. It’s a fairly simple process involved and there are a number of service providers who will be more than happy to sign you up.
But, first things first. Arm yourself with a little knowledge of how credit card processing works so you can sound smart when you strike up a conversation. Basically, the major players are credit card companies like Visa or MasterCard; banks, which tie up with these companies to issue credit cards to their customers; and clearing houses, which actually process and verify transactions. Then there are merchant account providers, or independent sales organizations, whose goal is to ensure that your company is successfully set up with a credit card merchant account. These are the people you will be talking to, so make sure you choose a reliable provider. Some providers, such as Merchant Accounts Express, offer a price protection guarantee to protect the interests of the credit card merchant account holder.
Correct! Now that we’ve got that out of the way, let’s get into what infrastructure you need to operate a credit card merchant account. Well, the most important thing is to establish a gateway, which is a means of communication with the clearing house. One way is to use the swipe machine, like the ones you see in all retail establishments. The credit card is swiped into the machine, which passes the information to the clearing house. Once the transaction is authorised, a charge slip is generated. The card owner signs a copy and hands it over to the credit card merchant account owner.
If your business relies heavily on e-commerce, then clearly the swipe machine is not for you. One option is to install a type of software on your computer that will facilitate the exchange of information between your credit card merchant account and the clearing house. However, this requires manual keying in of customer card data, transaction value, etc. So you have to factor in the extra time and effort and also the possibility of data entry error.
Still not happy? No problem. Most e-commerce websites use real-time payment gateways, such as PayPal, which complete the data transfer and verification process when the buyer is online. The credit card merchant account owner need not bother with any manual process. The only precaution that needs to be taken is to ensure compatibility of the gateway with other software and systems that are part of the e-commerce process (eg shopping cart software).
That’s all you need to know about credit card merchant accounts. Of course, once it’s installed, it will help push your sales skyward!
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