Credit Card Processing - An Insight

Business everywhere in the world has taken a whole new dimension

. The concept of using hard cash has become extinct and almost every individual consumer today use their credit card for making payments and hence, at the end of the sellers and merchants, it has become essential to use credit card processing equipment and services so that they can increase their sales potential. This is because of the fact that if a merchant does not have the facility, the result will be nothing less than loss of business because consumers who are more dependent on credit cards will very likely look for merchants who will provide credit card processing advantage.

Credit card processing is a method which is used to accept payments electronically and funds are transferred from consumer account the merchant account. Having a credit card processing terminal makes sense for those merchants who have who have a traditional setup of brick and mortar. However, mobile businesses where the service travel to customers, credit card processing makes little or no sense because, the services are to be provided first and later the credit cards are to be processed. This is not very feasible and can lead to a number of problems. Some of the mobile businesses are: plumbers, home repair, cable technician etc. For these businesses, taking cash at the end of the service provided makes more sense. What about online merchants and companies accepting phone orders? Let us take a look at them.

In case of retail business the credit card processing is a standard method in which the merchant payments for credit card are accepted using a card terminal or POS (Point of Sale) system, which comes with a card reader integrated in it. The card terminal or the POS system is physically present at the brick and mortar shop of the merchant. During a sale the credit card of the customer is swiped at the terminal which in turn connects with payment processor using a dedicated internet connection or using dial-up modem. This is the best solution for any business with brick and mortar set-up. However, things change a bit when it comes to businesses which travel to the customers. Then comes the wireless processing of credit cards! In this method the terminal connects to the payment processor wirelessly.

In case of online businesses, things change considerably. There is a virtual terminal online and the terminal has a payment gateway. The virtual terminal allows merchant to log in using any internet connection through any web browser. The merchant the needs to type in the information of the customer and the terminal will start processing. In case of the advanced users of the payment gateways can be easily integrated using the API calls and programming. For businesses which deal with telephone orders and mail orders, MOTO processing is used. MOTO stands for Mail Orders, Telephone Orders. However, this type of credit card processing is not very popular because of the web based ordering interface.

Copyright (c) 2011 Joe Maldonado

by: Joe Maldonado

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