subject: Opting for Third Party Processors-Reasons [print this page] Opting for Third Party Processors-Reasons
Due to the development of credit card and its wider usage every business has no other option than to accept credit card payments. Both the offline and online stores go for credit card payments because of the preference of the customers. The payment processing of credit card is easier for the customers but at the same time as a merchant you may face some problems. Though there are a number of benefits which will be guaranteed by your merchant account provider the payment processing of credit cards does have some hiccups. However these problems are very less when compared to the benefits that you will reap by accepting credit card payments.
At the point of sales, the buyers will present the credit card for payments. When you swipe the card for authorization it may so happen that the card might be declined for payment processing due to many reasons like the amount exceeds the credit limit, card has been closed or it has expired. Under such circumstances it becomes necessary to reject he credit card and there may unpleasant conversation between you and the customers. This may also lead to lost sales and there will be time delay at the billing counter which will cause inconvenience to other customers.
If you have decided to accept credit card payments, it becomes necessary to open merchant account for payment processing. Such merchant account comes with fees and other charges. Every time you accept credit card from your customer you will be charged a discount fees on the total transaction amount. You will find this in you monthly bill. As your transactions of accepting credit card increases so will your discount fees in the statement. You will also find other charges like the monthly fees for the terminal and administrative fees and likewise. All kinds of bank service charges will be included in your statement.
When accepting credit cads, as payment mode your merchant account provider will provide you with a terminal which will be connected to the telephone line. This is the system through which the payment processing is done. All the data is transferred electronically like authorization and settlement. So there are chances that due to some technical problems the server may go slowly and you may not be able to process the credit card given by the customer. Due to the problems in the terminal also there are chances of slowdown in the payment processing of the credit cards. This entire problem will lead to delay at the billing counter and customers will be very dissatisfied. You will ask for another payment mode like cash and if the customer doesn't have sufficient cash then he may leave the shop without purchasing anything. All these will lead to lost sales.
Frauds through credit cards can be numerous. So its up to you to be vigilant when accepting credit cards. As a merchant you will be solely responsible for accepting any kind of fraudulent credit cards. Under such cases your merchant account provider will charge the amount from your bank account. When such cases happen repeatedly then you may even lose your merchant account as they will be terminated. So be prudent while accepting the credit cards and processing the payment.
