The Switch from Merchant Services Account Provider Banks to ISO’s and Electronic Devices

A merchant can be anyone who purchases or sells goods for a profit. You must have a merchant account to conduct credit and debit related transactions. This account is involved in the actual verification as well as acquisition of funds from charging. Your business can accept these types of transactions by using a merchant services account provider. Charges may be handled within a location, by telephone, or in ecommerce settings. Today’s consumers have made it necessary for most businesses to obtain an account. They expect the convenience of using their card anywhere they go. When charging first started out, Visa or MasterCard affiliated banks were the main supplier of merchant services.

After much industry consolidation, banks have pretty much stopped being an account provider. Instead the industry has a few dominating issuers such as Bank of America, Chase, Capital One, and Citibank. Banks process cards rarely because it is too much work to sell this service to smaller businesses. Instead the banks outsource this task to Independent Service Organizations (ISO). Greater numbers of transactions and businesses decrease the cost of processing cards. To cut down costs, many banks outsource to larger processors. An ISO handles all aspects including selling, support, and transaction processing. They set the price in the form of percentage rates or flat fees. This change has provided many businesses the opportunity to accept charge transactions at an affordable rate. If you are considering acquiring a merchant services account, take some time to learn about your particular bank’s services as well as the most dependable ISO’s.

Merchant Services Account: Card Running Advancements

A merchant services account is an agreement between the retailer, merchant financial institution, and processor for settling card payments. It is how a business can begin to accept consumer charge transactions. Once the account is in place, a method for running the card must be set up. Most of these transactions are performed electronically via swiping, key entry, or by reading a computer chip. Before technology advancements, the most common ways were to either send an imprinted slip through mail or authorize the transaction by phone. This was a two part process because the card had to be imprinted at the time of the payment and then processed later.

Electronic devices have simplified this procedure allowing all steps to be done in a matter of seconds. A credit card terminal is typically used in businesses as a stand alone device. You can use a terminal for both swiping and key entry. Any additional information needed to process the card can also be entered into the terminal. Newer terminals also process debit and gift cards, and perform check verifications. Payment gateways are one of the most popular methods for authorizing payments on ecommerce websites. Most merchant providers use a third party gateway for processing. You can log into the gateway to key enter credit transactions or connect a shopping cart to this gateway for additional convenience. Shopping carts allow for real time processing on the site. Other methods for running transactions are available. Your business sales processes determine which one is most sufficient in conjunction with the selected merchant services account provider.

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