What Do You Know About Processing

Why Merchant Services Greatly Affect Your Business

Businessmen only gets a small picture about what merchant services are all about, they think it is just some credit and debit card processing. But debit or credit card transactions are just the small part of it, the entirety of merchant services helps your business grow.

Merchant services are widely used by any store who accepts credit card or debit cards. If they want to receive payments online or via mobile then they need merchant services. To have this realized, they need to get a reliable merchant services provider to create new platforms and technology.

Let’s start by comparing an ecommerce-based business to a body shop, pretty sure you can tell that both of these establishments has different need. And although both of these businesses needs security, an ecommerce business will need a more heightened security system than the body shop. Body shops required a physical interaction for payment processing unlike ecommerce businesses that needs a virtual-based payment.

So here’s how payment processing work: A business owner needs a merchant services account with the provider. Once they set up an account, they can start accepting these payments.

When someone uses a debit or credit card as the mode of payment, the payment processor will simply be the outside party administrator for the customer, merchant and the banks. Once the card is swiped a message then is sent though the payment processor to let the bank confirm or decline the transaction. This makes sure the cardholder has enough funds to cover the expenses. After the bank approves the transaction, the processor then send the authorization code to th merchant so the customers can continue with their transaction.

But if the bank declined the transaction, then the processor will need to notify the merchant so that they can inform the customer. So that the merchant can let the customer use a different form of payment.

After all the transactions have been made for that particular day, the merchant will then send the authorization codes to the payment processor. Which the processor will then forward to their respective banks to be settled. They call it batching or batch settlement.

These sensitive financial date that is being handles by the merchant everyday is very prone to fraudulent activities, that is why they need a heightened security protocol to avoid it. These merchants needs to be compliant in maintaining these security protocols to prevent having to penalty. Not to mention they could lose their account for the merchant services which means they will no longer be able to process credit card or debit card payments. This can greatly impact their reputation.

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