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Electronic transactions have become the most commonly preferred method for purchasing goods or services. A variety of payment cards can be used by consumers, including credit, debit, gift, charge, and many others. Electronic payment cards are backed by the account holder or as credit. Account administration determines how plastic is classified. Credit transactions involve the holder making purchases with the promise to pay later. The customer has a set limit that has been issued in advance.

It is common to confuse these with charge cards; however, the issuers do not require a balance payoff each month. Instead, credit accounts have a revolving balance customers can continue to add to until their limit has been reached. Debit transactions draw the funds directly from a bank account. Store-value cards have money deposited onto them and may be anonymous or in the holder’s name. Gift cards are another common form of plastic your business can provide and accept for payment. Methods accepted directly affect the service options available to your business.

Credit Card Processing: Understanding the Technology and Methods

Transmission of data for credit card processing can be accomplished through keyed entry, magnetic strip reading, or smart chip technology. A magnetic strip is used to store data that can be read by a swiping machine. Strips are commonly seen on identification and various types of plastic. Smart chips are a newer technology that has been recently introduced by providers in the industry. Some providers use an integrated chip designed to store embedded information on the card. These cards are meant to provide additional safety to the holder.

Proximity cards are perhaps the newest types being offered today. They can be read without having any contact with a reading machine. Their reading range is anywhere between zero and three inches. All types of cards are designed to be secure as possible, but could still have to deal with fraud. Verifying identity of the account holder is one of many ways your business can reduce this risk.

Credit card processing can involve one time, recurring, or automatic purchases. One time transactions typically occur online or at a retail location. The customer schedules recurring payments, with their most common use being for service reimbursement such as utility bills. Another example of these transactions is payment for a contract to a gym or other facility.

Banks can perform automatic transactions for online bill pay. The two largest decisions you must make before considering processing providers are types of transactions and their frequency. Are you selling a service that may require an account to be billed each month? Will multiple customers be making one time purchases based on a selection of products? Once these questions are answered, you can provide the necessary information to a processor of electronic payment cards.

As a credit processor, AVPS has many types of accounts and options for your business. Our professionals can take your general business requirements and ensure all current and future payment acceptance needs are met.

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