Starting a new business means learning about a lot of new terms. Credit card processing and merchant solutions are a few words that you should be very familiar with if you want your business to flourish in this era.
Before going into the depth of what these terms are, let’s just try to understand the basic concept of what credit card processing and merchant solutions are. Why these are important for a business in this century.
What is Credit Card Processing?
Suppose you are at a cafe for a cup of coffee and you pay for your coffee through your credit card. You are done with your part after typing in your code and get the message that your transaction has been completed. This all happens in barely 2 minutes but there is a very long process on the other side which is known as Credit card processing.
In simple words, credit card processing is the expression given to the whole process from which the individual pays from his credit card to when the amount goes into the merchant’s account.
It may not seem that important to understand all the inner workings of credit card processing. A business person, you need to get all the information and help regarding this process as there are barely any places out there that do not use credit card transactions for paying.
Merchant Solutions and Providers
When an individual starts a business of his own, he starts to look for credit and debit cards as payment methods. And that’s where he will need to understand the concept of merchant solutions and merchant solution providers.
A merchant solution provider is a company that offers services that can uphold your business when preparing client installments. It helps the merchants to receive credit and debit card payments or any kind of other payment methods.
A merchant solution is a solution given by that company to help you with your payment methods.
Merchant solution providers are also known as processors, merchant account processors, merchant service providers, and MSP as short.
What are the different types of Merchant Solutions?
If you started your own business, you would want everything for it to be perfect. That’s exactly why your merchant solutions and services should be special and should not give you trouble and make everything easier for you.
There are a lot of solutions that a merchant solution provider would offer you as a merchant. What type of solution you want, depends on what type of business you have. They have a list of services that they provide the merchant for credit and debit card payments.
With the help of these merchant solutions, you will provide your customers a secure channel for their transaction payment. Following given are some common merchant solutions that may help your business:
· Merchant Accounts:
Merchant account is a very important term in credit card processing. It is a bank account that permits businesses to accept payments in many ways but mostly debit or credit cards. It is set up under an understanding between a payee and the merchant acquiring bank for the deal of payment card transactions. And this merchant agreement has the party of MSP involved.
This is an account where the amount is settled after the transaction is done. That amount is then moved by your supplier into a business account that you determine.
A merchant account is necessary for a business that wants to receive payments through debit and credit cards. MSP provides merchant IDs which gives security from deception making your business simpler to recognize payment processing systems.
· Credit Card Terminals:
A credit card terminal is a free-standing machine of electronic hardware. That permits you to swipe or enter the key or any extra information needed of the credit card for the transaction. And then the data will be sent to your provider’s processing network.
Credit card terminals can be bought but also rented from your MSP. It is more preferable to purchase your terminal from your provider or it can also be purchased from an outside provider. Terminal renting is mostly prevented because of the no cancelable idea of the leases and the payment can be more than the worth of the terminal over the lifetime of the rent.
These decisions are difficult and confusing to make and MSP will give solutions. That will make it easier for you to decide which is the way for you to go.
· Virtual Terminal:
A virtual terminal is another kind of software that permits them to receive an amount with a credit card, without requiring the actual presence of the card. Which is also known as a card not present transaction.
When a client needs to pay via phone, a virtual terminal comes in handy. It permits the individual accepting the amount to enter the client’s details of his credit card to make an installment.
In contrast to receiving the payment with a frequently used terminal, the presence of the credit card isn’t needed. The information is then shipped off to the payment processor to deal with the payment.
Point of Sale System:
POS is the time and place where the retail transaction is finished. To compute the sum owed by a client, the merchant might utilize different gadgets like cash registers, barcode scanners, and scales. This is also known as POS system.
With the help of a computer display, these systems join the tasks of a credit card terminal. Which can help you to deal with everything all at once through one piece of hardware.
Numerous MSP offers check scanners, cash drawers, and tablet mounts, permitting you to receive any type of payment through a single gadget.
· Payment Gateways:
A payment gateway is a kind of service provided by the MSP for a business that is online.
It works with a money transaction by the exchange of data between an online payment portal. Which can be through a website, or cell phone, and an acquiring bank.
This is the software that conveys from your site to your provider processing network. Which permits you to receive payments over the web.