Many businesses accept credit card payments from customers every day, but they don’t give it much thought. It’s beneficial and important for a business owner to be familiar with the payment process, starting with the main players. You’ll be better prepared to deal with any issues that might arise if you are more informed. To accept a credit card, you must first learn about the various players involved and the steps that take place from the time the card is swiped or keyed into a terminal or web page to the point where the funds are transferred to your account.
The Customer
You can charge the person using their credit card for goods or services.
The Merchant
That’s you. Merchants are companies that allow customers to pay for goods and services with a debit or credit card.
The Issuing Bank
The issuing bank, or entity or bank, is the one that provides credit to customers and issues credit cards. These institutions pay the merchant bank, also known as the acquiring banks, on behalf of their customers.
Merchant Bank (or Acquiring Bank)
A merchant bank is the bank or agent that provides you with your account. The merchant bank and the merchant negotiate an agreement to accept cards. The merchant bank will represent your interests throughout the entire process, from installation to daily service calls. The merchant bank receives payments from issuing banks via the card network and transfers the funds to the merchant account.
The Card Network HTML
The card networks are at the heart of the payments industry. They facilitate transactions between consumers, merchants, and processors. These companies provide electronic networks that allow the various players to communicate with each other and process transactions. They charge financial institutions a fee based on the total volume of transactions, rather than per transaction.
Payment Processing
Payment processors are intermediaries that allow transactions to be processed through the system to receive authorizations and deposits using the card network. This movement is facilitated by several major payment processors. Merchants rarely choose their payment processor. This is determined by the bank or financial institution that your bank or merchant provider represents.
Payment Gateway
A payment Gateway is a software and a set of APIs that allows the merchant to connect to the systems required to send a payment request. Payment gateways securely send card data to the issuer via the processor the moment the card data is entered via swipe, key, tap, or dip. The payment gateway receives authorization from the issuing bank via the payment processor.
This post was written by a professional at Exzact Business Solutions. TRANSPARENT | AFFORDABLE | SIMPLE Merchant Services, Websites, and Social Media Done Right. Exzact Business Solutions are on a mission to educate local businesses to ensure smiles, savings, and solutions. Exzact clients save an average of 30% on their processing alone. No Contracts, Free Equipment, Local Support, No Rate Increases, and More. Exzact Business Solutions’ goal is to educate the local business community in order to ensure smiles, savings, and solutions. Exzact Business Solutions is an Independent Sales Organization with strategic partnerships dedicated to cultivating reliable and trustworthy relationships in the Payment Card Industry, allowing us to tailor products and services to the needs of each merchant. Contact EBS and see what a difference having the right advocate can make! Click here to learn more!
