Credit Card Merchant Accounts

By Marcus Peterson

When a merchant accepts a credit card from a customer to complete a sale, the customer’s card number, credit card information, the merchant ID and the amount received travel through the bank’s or the processor’s computer network. The merchant can receive the credit card payment from his customer in three ways: when the customer uses the credit card at the terminal; over the Internet, where either the merchant or the customer keys in the necessary credit card information; or through the phone, where the merchant puts in the information. It is the responsibility of the bank or the processor to check with the corresponding card network, to confirm the card’s validity and to see if the necessary funds are the available for the sale.

Subsequently, the customer’s bank sends the merchant an approval over the network. This formality completes the sale. However, no money will be transferred to the merchant’s bank account until the full batch – that is all the sale completed that day by the merchant - has been transferred to the merchant’s processor or bank.

At the culmination of the business day, the merchant sends over his batch to the credit card network for necessary processing. The transactions to the credit card network go through the merchant's credit card processor. Each of those transactions is then sent back to the customers’ bank for debiting. The bank then debits the customer’s account and transfers the correct funds to the merchant's bank or processor through the Federal Reserve Bank's Automated Clearing House. The bank or the processor collects the funds and sends them to the merchant’s bank account.

What is the Best Credit Card Merchant Account Service?

By Joe Mears

It's a tough question and can depend on your specific requirements. However, there are certain characteristics that everybody needs to have in a merchant account.

First up is low transactions costs. Now when I say transaction costs, what I actually mean is the total fees you will be paying to process credit card orders. It sounds simple and it should be, but it's not.

Rates are a great way for companies in the industry to get a little 'creative' with their advertising campaigns and hide some of their charges that you only find when your first statements come through.

Next is the contract length, why sign a long term contract with a company you don't know? I certainly have no idea, if a company wants you to sign one it would send alarm bells ringing in my head. If they provide great service at low rates, why would you leave anyway?

Then you've got the service levels. Can a company provide for your full business needs? Maybe you are an online business and need an internet merchant account, but what if you want to expand, will your provider be able to offer different payment terminals, or even mobile terminals, to be able to take orders at a big exhibition for example.

The list goes on, but it ultimately ends with a company that will get your transactions done with no fuss, because you won't make anything if you can't take orders. That means there has to be an absolute dedication to customer and technical service and support.