Credit Card Payment Processing Basics In the society we live in today you would be hard pressed to locate people walking on the street that have actual money in their pockets. They may have ten or twenty dollars for the purpose of buying a small item, but for the most part they will have credit cards and debit cards in their pockets. Because there are so many individuals that carry these types of currency with them, the need for credit card payment processing has increased.
The first thing that you must know about credit card payment processing is that you have to have equipment to do this with. You will need devices that can read the data on the plastic pieces when the customer runs them through the machine. The device then transmits the data electronically to a terminal that connects the data to the proper financial institution so the money can be deducted from the account of the cardholder. All of this takes place in seconds and then the customer is happily leaving the store.
Credit card payment processing is not free to the merchant that allows it. Each merchant is required to pay a portion of the proceeds they make from accepting this type of payment to a third party that links them with the financial institutions. The amount that these different third parties charge can vary, but generally a merchant pays one to two percent of the amount that was charged.
A merchant does not get their money as quickly when they engage in credit card payment processing as they would if their customer gave those cash, or a check, for the purchase. The companies that issue the accounts to the customer often only pay the stores once every thirty days. Since these merchants have to wait to get their money they often charge the customer a convenience fee for allowing them to use their cards. These fees are often very low, being no greater than five dollars, and frequently being only one dollar.
Debit card customers often have to spend a minimum amount before the store will accept that form of payment. The reason for this is that the banks and financial institutions often charge the store for the debit transaction. If the customer spends a minimum of five or ten dollars the bank will usually wave the processing fee for the debit transaction. So the store owners require all customers that want to use a debit card to spend a minimum of five dollars.
Most of the time a debit transaction or a credit transaction will require the cardholder to have a personal pin number to access the funds. These personal pin numbers are established when you get the
card and they protect the cardholder from unauthorized users making charges on the accounts. Never divulge your pin number when making a purchase. The cashier at the store will have a pad for you to type the number into. You do not need to tell the cashier your personal pin number.
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