What is Credit Card Processing and Why is it Important?

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More than 3 billion people around the world own and use credit cards, with each person having at least 3 cards in their name. Without a doubt, credit cards are an important element in every person’s daily life, be it buying clothes or paying bills. If you want your business to cover more area and attract more clients or customers, then you should consider credit card processing.

What is Credit Card Processing?

Technically speaking, credit card processing is a financial transaction that involves electronic access to a customer’s account. Currently, there are four big names in credit cards and processing any one of them can help boost your business. The first is Visa, which last year had 261 million users. 176 million strong is Mastercard. In third place is American Express, which is used by more than 50 million customers in the US alone.

what are the benefits?

Paying with cash is nice, but accepting credit card payments also has many advantages. For one, it makes your company credible in the eyes of customers. If you accept cards, customers will think that your company is safe and reliable to deal with. Trust is a big factor in business, and if a customer trusts you, chances are he will shop from your store.

how does this credit work

Credit card processing involves two steps: authorization and settlement. The authority is obtaining bank approval for the pending transaction. In this step, the buyer provides relevant card details such as account number, expiry date and card security code to complete this step.

On the other hand, settlement involves the process of transaction. In this process, funds are transferred from the bank to your company account when the transaction is authorised. If not, the customer has to use another card or choose another payment method.

Equipment used for credit card processing

With the advancement of technology, more and more tools and avenues have been developed to allow even small retailers to do credit card processing. Here are the different machine options should you decide to jump on the credit card processing bandwagon:

Dual Com Terminal – This easy-to-use plug and play device requires only an Internet or phone connection for efficient card processing. It is the cheapest of all services, yet it is also one of the fastest.

Wireless Terminal – You can take this terminal anywhere to do card processing as there is no wire or cable connection. Not only do you get instant receipts, but wireless solutions provide easy and efficient transactions at an affordable cost.

Dial-up terminal – Also known as analog terminal, it is the most widely used device in the world. This plug and play terminal can easily process transactions with only one phone line.

Mobile Phone Terminal – This device allows you to process card transactions with a smartphone such as an iPhone, Samsung Android phone or Blackberry. All you have to do is download the program from iTunes or Android Market place. Set-up and card processing is easy, and the price is reasonable.

Internet Processing Terminal – Also called a gateway terminal, this method allows you to process card payments by surfing the net through your web browser. You can even e-mail receipts to your customers as needed.

Point of Sale Terminal – For this method, you need to have a certain program installed in your Point of Sale terminal. With its own Gateway Transaction Manager, you don’t need to worry about modifications or changes to your system.

For any business, credit card processing is important. This gives you an edge over “cash only” merchants. With so many options available for this type of payment transaction, you are sure to choose the one that best suits your business size, needs, and most importantly, budget.

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