Credit Card Merchant Accounts Help You Boost Your Online Business Revenue

by Martina Smith Payment service

Introduction

Credit cards are one of the most preferred payment methods in the online business regime. The new age is the age of digitalization, where 5.16 billion people use the internet and around 2.64 billion are online shoppers. Most of them prefer to pay via credit card for their online shopping due to numerious benefits. The convenience of paying via credit card is the reason why credit card processing has become a fundamental need for online businesses. Nowadays, it is hard to survive in this competitive market without embracing credit card payments. To accept credit card payments from customers, industries require a special type of credit card merchant account. In this article, we will understand credit card processing and how to choose an ideal one for your business.

 

What is a Credit Card Merchant Account?

A credit card merchant account is a type of financial account that allows businesses to accept credit card payments from customers. It is essentially a relationship between a business, a merchant bank (also known as an acquiring bank), and a payment processor. These accounts are provided by banks, financial institutions, and merchant service providers (MSPs). However, banks and traditional financial institutions hesitate to work with high-risk online businesses. Usually, MSPs who specialize in working with high-risk companies provide credit card processing solutions to all sizes of high-risk online businesses.

How Does Credit Card Processing Work?

Here are simple steps how credit card processing works:

..1.         Customer Makes a Purchase:

A customer selects products or services from a business and wishes to pay with a credit card. The customer enters his card details on the checkout page. The checkout or payment gateway page safeguards these details by encrypting and tokenizing the sensitive information.

..2.         Authorization Request:

The business, through its online payment gateway, sends an authorization request to the payment processor. This request typically includes the customer's credit card information, transaction amount, and other relevant details.

..3.         Payment Processor Verification:

The payment processor forwards the authorization request to the customer's issuing bank (the bank that issued the credit card). The issuing bank checks whether the customer's credit card is valid, has sufficient funds or credit limit for the transaction, and whether there are any fraud alerts or holds on the card.

..4.         Authorization Response:

The issuing bank sends an authorization response to the payment processor, indicating whether the transaction is approved or declined. If approved, the response includes an authorization code.

..5.         Transaction Approval:

The payment processor relays the authorization response to the business, informing them whether to proceed with the transaction. If approved, the business can complete the sale. If declined, the business may ask for an alternative payment method.

..6.         Batch Processing:

Throughout the day, the business accumulates authorized transactions. At the end of the day or at specified intervals, they submit a batch of authorized transactions to the payment processor for settlement.

..7.         Settlement:

The payment processor transfers the funds from the customer's issuing bank to the business's merchant account, typically within a few business days. This is when the business officially receives payment.

..8.         Payment to Issuing Bank:

The payment processor initiates the payment to the issuing bank, covering the cost of the authorized transactions.

..9.         Merchant Fees:

The business incurs fees for credit card processing, which include interchange fees (paid to the issuing bank), assessment fees (paid to the credit card networks like Visa or Mastercard), and processing fees (charged by the payment processor and merchant bank). These fees are deducted from the funds deposited into the high-risk merchant account.

..10.     Reconciliation:

The business reconciles its transactions and fees, ensuring that all funds are accounted for and that they match their sales records.

It's important to note that credit card processing involves various parties, including the cardholder, issuing bank, payment processor, merchant bank, and credit card networks. Each party plays a role in ensuring the security and efficiency of credit card transactions. Businesses must comply with industry standards and security measures, such as Payment Card Industry Data Security Standard (PCI DSS) requirements, to protect sensitive cardholder data and maintain the trust of their customers.

How to Choose an Ideal Credit Card Processing Provider?

Choosing an ideal credit card processing provider is crucial for businesses looking to efficiently and securely handle card transactions. Here's a step-by-step quick guide to help you make the right choice:

..11.     Assess Your Business Needs:

Understand your business requirements, including transaction volume, types of cards you want to accept, and whether you need online, in-store, or mobile processing capabilities.

..12.     Communication with MSPs:

Clearly communicate with merchant service providers whether your business is regulated or unregulated. Suppose you are an unregulated merchant; then this becomes the 2nd most important thing after assessing your business. Consider the MSP that has experience serving in your particular industry.

..13.     Compare Fees and Pricing Structures:

Look at the provider's fee structure. Pay attention to transaction fees, interchange fees, and monthly fees. Ensure the pricing aligns with your budget and business model. Choose only MSP that offers a transparent fee structure with no hidden fees.

..14.     Security and Compliance:

Ensure the high risk payment processing provider complies with PCI-DSS and GDPR requirements to safeguard customer data. Check their security protocols, such as encryption, tokenization, AVS, CVC checkers, 3-tier authentication, fraud prevention measures, chargeback prevention tools, and other advanced AI and ML-based tools to ensure the protection of funds.

..15.     Integration Options:

If you have an existing e-commerce platform or app, check if the processor seamlessly integrates with them. Integration can streamline operations and reduce errors. Ready-to-use APIs and Plug-ins can help merchants integrate in no time. Developer-friendly tools can be easily modified according to your unique needs. 

..16.     Customer Support:

Evaluate the provider's customer support quality. You'll want prompt assistance in case of issues or questions. Check for 24/7 support availability.

..17.     Contract Terms:

Read the contract carefully. Look for any long-term commitments, cancellation fees, or auto-renewal clauses. Avoid providers with restrictive contracts.

..18.     Reputation and Reviews:

Research the provider's reputation by reading reviews and asking for referrals from other businesses. A strong track record is a promising indicator.

..19.     Scalability:

Consider your business's growth potential. Choose a provider that can scale with your needs and offer additional services as your business expands.

..20.     Trial Period:

Some providers offer a trial period. Take advantage of this to test their services before committing.

Conclusion

In conclusion, selecting the right credit card processing provider is a critical decision for any business. It can influence your financial stability, customer satisfaction, and overall operational efficiency. As we've discussed, factors such as pricing, security, support, and scalability must be carefully considered before making a choice.

One credit card processing provider that stands out in the high-risk industry is WebPays. With a commitment to transparency, competitive pricing, and robust security measures, WebPays offers a comprehensive solution for businesses of all sizes. Their user-friendly interfaces and seamless integration options make it easy to adapt to various business models, whether you operate in a regulated or unregulated industry.

WebPays' stellar reputation and positive customer reviews show their dedication to providing exceptional service and support. Furthermore, their flexibility and commitment to helping businesses grow make them an ideal choice for both startups and established enterprises. So what are you waiting for? Acquire WebPays today. Apply Now.

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Created on Sep 11th 2023 23:51. Viewed 174 times.

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