Who are the parties involved in credit card processing? How to shortlist credit card processing companies for small business? The merchant or the business owner who requires a credit card processing and accepts the payment. The customer who pays the payment through credit card to the merchant for purchase. The card association like master card, discover American Express, and VISA that sets and check factors like interchange rates, the obtaining and issuing banks, and maintain the networks. The bank of the merchant that hold funds and obtain payment is the acquiring bank. The issuing bank is the bank of the customer or cardholder paying the amount. And finally, the best payment processing company or best credit card processing company that handles the purchase via card payments like a credit card, debit card, or online transaction acts as a medium between the merchant and customer.
The process involved in the payment
When a customer makes a purchase through a credit card, it is wiped at a terminal, which is recognized by the credit card processing company where the card is checked and approved. The payment is then transferred to the merchant's bank account through a merchant service provider. All the transaction details and data statements are checked and sent to the merchant every month. It is the reason you need to partner with a top merchant service processor in the United States.
How do the credit card processing companies charge?
The fees charged by the credit card processing are categorized as transaction fees, recurring fees, and one-off fees. The transaction fees are the amount charged with each transaction. These fees are set by the credit company itself. This is based on the type of card used where very expensive card means high interchange where credit cards are the costlier one, and the debit cards are the lowest. Additional recurring fees include statement fees, minimum fees, batch fees, next day funding fees, IRS report fees, annual fees, and many as per the statement provided. Some companies like MSBrokerSolutions offer value-added services such as POS solutions.
Pricing categories of credit card processing
The percentage charged with each transaction as the interchange varies with each card type. A flat rate, unlike the percentage, is a constant percentage paid for each card payment. Tiered rates are the costliest type of pricing, which is charged based on the qualifications. The simple flat-rate subscription is one of the most common and preferred types of pricing model used by merchants.
Online invoicing, EMV smart terminal, mobile payment solutions, online shopping cart, point of sale, and API are the standard payment processing technology.
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