Getting Down To Basics with Companies
Jul 3, 2018 // By:admin // No Comment
Businessmen only gets a small picture about what merchant services are all about, they think it is just some credit and debit card processing. Well, that’s not totally wrong but it simply misses the point about what merchant services are really about. How greatly it can impact the success of one’s business.
Stores who uses payments via debit card or credit card are using merchant services. Most especially when they also want to accept different modes of payment like online or mobile. To achieve this, a business owner needs a credible merchant services provider to provide forms of technology for new profit gaining opportunities.
Let’s start by comparing an ecommerce-based business to a body shop, pretty sure you can tell that both of these establishments has different need. And although both of these businesses needs security, an ecommerce business will need a more heightened security system than the body shop. Ecommerce businesses will need a virtual strategy for payment processing whereas being compared to a body shop which is more physical and will need an actual person processing the payment.
So here’s how payment processing work: Merchant services provider needs to get the actual merchant to get an account with them. After they get the account, that’s the time wherein they can process the payments.
When someone uses a debit or credit card as the mode of payment, the payment processor will simply be the outside party administrator for the customer, merchant and the banks. The swiped card will now let the payment processor send a message to the bank to determine if the bank will accept the transaction or not. This makes sure the cardholder has enough funds to cover the expenses. After the bank approves the transaction, the processor then send the authorization code to th merchant so the customers can continue with their transaction.
On the other hand, if the cardholder’s card gets denied by the bank then the processor will forward the message to the merchant to tell the customer. The merchant can then suggest to the customer to pay in cash or if they have another mode of payment.
After the transactions in the entire day has been done, the merchant will forward all the approval codes to the payment processor. Which the processor will then forward to their respective banks to be settled. Doing this is very essential, it is known as batch settlement.
But because the merchant is handling confidential information, it is vital that they have a security system to prevent any form of fraud. If these merchants do not follow these regulations about safety measures, there will be a large fine. Failure to follow these security protocols can even cost them their merchant services account. This can even lead to negative effects on their name in the business.