subject: The Different Credit Card Processing Companies [print this page] The Different Credit Card Processing Companies
Although credit card processingcompanies are known to be selective when it comes to accepting clients, a merchant can easily find a merchant service provider these days. There are several companies and institutions that offer companies the ability to process credit cards. These choices allow business owners to be selective as well, although some processors may cost a business more than others.
The most basic source when it comes to credit card processingneeds is, of course, the bank. The banks are the best processors because they directly handle your money although, strictly speaking, most, if not all, banks don't do their own processing (they usually outsource it). However, banks have stringent application standards since they directly deal with the account holder. If the account holder defaults on payments or accumulates a large number of chargeback, the bank is directly accountable to the credit card associations.
Third party processors and independent sales organizations are the next in line when it comes to credit card processing. Third party processors offer direct processing services, although that's basically what they just offer. In short: they cannot give the merchant a merchant account. These companies do the processing for the retailer instead.
Independent sales organizations, meanwhile, are like brokers. They represent numerous processors, so a business owner can easily contact an ISO for instant application to several credit card processingcompanies.
The disadvantage of these two options: they charge more than banks and other similar financial institutions. ISOs, in particular, have higher fees. Besides the third party processing service, they also work as a broker so they get paid as a broker (which means you might be charged for asking their assistance for your credit card processing application).
Offshore credit card processingservices provide the same service for companies that are not located in the country. Their fees are generally lower, but the laws that govern them are different from the US laws. Lastly, some credit card associations (such as Discover and American Express) allow merchants to apply for a merchant account directly through them. Major associations such as Visa and MasterCard do not have this kind of service.
