The Essentials of Services – 101

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Important Things To Know About Merchant Services

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.

Any establishment that accepts debit card or credit card payments need to use merchant services. If they want to receive payments online or via mobile then they need merchant services. To achieve this, a business owner needs a credible merchant services provider to provide forms of technology for new profit gaining opportunities.

Let’s say an ecommerce-based business for instance, it has a different need when compared to a body shop. An eCommerce business will need a more complex security system than a body shop. A body shop will need a payment processor up front or in person unlike an eCommerce business that requires a virtual mode of payment.

So how does it work, you ask? First the merchant needs to have an account with the merchant services provider. Once they set up an account, they can start accepting these payments.

Payment processors serves as the bridge between the customer, banks, merchant and credit card networks. Once the card is swiped a message then is sent though the payment processor to let the bank confirm or decline the transaction. This is done in order to check that the cardholder has sufficient fund in their account to pay for the transaction. After the bank approves the transaction, the processor then send the authorization code to th merchant so the customers can continue with their transaction.

But if the bank declined the transaction, then the processor will need to notify the merchant so that they can inform the customer. So that the merchant can let the customer use a different form of payment.

After all the transactions have been made for that particular day, the merchant will then send the authorization codes to the payment processor. The payment processor will then send it to the banks for further processing. They call it batching or 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. Any merchant who does not strictly follow these guidelines will need to face a penalty or a fine. Failure to follow these security protocols can even cost them their merchant services account. This can greatly impact their reputation.

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