How Credit Card Processing Works

What You Need to Know About Credit Card Processing

Credit card processing is more complicated than it may seem. There are many different parties involved, which all work together to process one transaction. If you aren’t aware of the process and everything involved, you will be more likely to overpay for the credit card processing at your business. Just becoming aware and learning the basics of how credit card processing works, you can be sure that you’re getting the best deal. The four parties involved in a credit card transaction are the customer, the bank that issued the customer’s credit card, the merchant, and the bank that is providing the credit card processing for the merchant, also known as the acquiring bank. Just as customers are “borrowing” money from the issuing bank when they make a purchase with their credit card, a merchant is also “borrowing” money from the acquiring bank, so both the issuing bank and the acquiring…

Read Full Post
Overpaying for Payment Processing

Three Ways to Tell if You’re Paying Too Much For Credit Card Processing

Many businesses overpay for their credit card processing, possibly without even realizing it. So how do you know if you are paying too much? There are three major ways to tell if you’re overpaying. The first one is to look for the word “non-qualified” on your monthly billing statement. If you see that word, there’s a good chance you’ve been paying too much. “Non-qualified” is associated with the tiered pricing model, in which case processors can randomly choose which transactions they want to charge you more for, not based on any legitimate reasoning. If you want to lower your costs, you should switch to a processing company that uses interchange plus pricing instead. This kind of pricing structure distinguishes between different components and allows for more transparency in the reporting. Compared with tiered pricing, it usually leads to lower costs for merchants. If you are using a flat rate processor,…

Read Full Post