Sunday, November 29, 2015

The Merchant Account Processor (part 1 of 2)

To process card payments, as a business owner you must be equipped with a credit card terminal or a merchant account processor. This indispensable electronic equipment accepts swipe and manual key-enter of vital information needed in credit card transactions. Related transactions such as gift cards and check verification are also accepted in this equipment.

So how does this equipment works? What are its vital parts? Merchant account processor or credit card terminal needs a power supply to work but there are also terminals that may use batteries in case of power outage. They may either connect to a telephone line or to the Internet but new models can now also connect through a mobile network which enables a wireless transaction. The equipment is consists of a modem, magnetic stripe reader, keypad, printer, power supply and memory card.

Another vital information you need to know is the method of credit processing. A merchant account provider has the capacity to trade a means to process credit cards for business owners. Processing of credit cards is done electronically to an acquiring bank. Verifications of the status of credit card account are automatically known when it is connected through the network.

The actual billing of the charge is summed up at the end of each day batch. An authorization fee is the most prevalent daily charge which is sent to the bank that issued the card even the transaction is declined. Another daily charge is the batch fee. Batching is done when the business owner sends the completed transactions for the day to the bank acquiring the payment.

A merchant account processor can be acquired by the business owner through actual purchase, rent, lease or this may be also offered free in exchange for contractual obligations from a merchant processor. A thorough review of contractual obligation should be made by the business owner before deciding on a merchant processor and a credit card terminal. A business owner should be very cautious on the terms and conditions set by the merchant provider. Everything that had been discussed verbally should be the same thing that will stipulate in the contractual agreement.

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