What is Merchant Services Credit Card Processing?

Accepting credit card payments is vital to stay competitive in today’s world as a business. Not only does it offer convenience to customers, but it also helps increase sales and revenue. Accepting credit cards involves more than just swiping them; it requires a payment processing system to handle transactions and transfer funds to your business account securely. That’s where merchant services credit card processing comes into play. Credit card processing enables businesses to accept customer credit card payments by creating a quick process that involves all parties, including;

  • the business owner,
  • the customer,
  • the provider,
  • and the issuing bank.

Credit card processing starts when a customer pays with their credit card – the payment data is securely encrypted and sent to the merchant services provider, who validates the transaction, provides approval, and deposits the funds into the business owner’s account.

How does Credit Card Processing work?

This process involves four steps: authorization, batching, clearing, and funding.

  1. Authorization: The merchant requests approval from the issuing bank to confirm the customer has sufficient funds to cover the transaction. Then the issuing bank checks the customer’s account balance and sends an approval or decline response to the merchant services provider.
  2. Batching: Transactions are grouped and sent to the merchant services provider in a batch. Batching reduces the processing time and helps manage transactions, allowing time to void any transaction necessary before the close of the batch. The merchant services provider verifies each transaction and calculates the amount transferred to the business owner’s account.
  3. Clearing: Funds are transferred from the customer’s account to the issuing bank. The merchant services provider communicates with the issuing bank to confirm the funds are transferred securely and accurately.
  4. Funding: Finally, funds are transferred from the issuing bank to the merchant services provider, who then transmits the funds to the business owner’s account. This transfer can happen on the same day or take up to three business days.

What are the types of Credit Card Processing?

There are two types of credit card processing: traditional and integrated.

  1. Traditional: With traditional credit card processing, businesses use a standalone credit card terminal or virtual terminal to accept payments. The credit card terminal is connected to the internet or hard-line, allowing customers to swipe their credit card for processing. The terminal then sends the payment information to the merchant services provider.
  2. Integrated: Integrated credit card processing is more advanced, allowing businesses to accept payments through their point-of-sale (POS) system. It integrates the credit card processing system with the business’s inventory management, accounting, and customer relationship management systems, helping businesses manage transactions more efficiently and accurately.

What are the benefits of Credit Card Processing with a Merchant Services provider?

Total Merchant Services offers several benefits to businesses, including:

  • Increased Sales: Accepting credit card payments makes it easier for customers to purchase, leading to increased sales and revenue.
  • Convenience: Credit card payments offer a convenient payment option for customers, which can help retain existing customers and attract new ones.
  • Improved Cash Flow: Credit card processing allows businesses to receive payments faster than traditional payment methods, which can improve cash flow and help in managing your business.

Accepting credit card payments through a reputable merchant services company like Total Merchant Services offers several benefits to businesses, including increased sales, convenience, and improved cash flow. Business owners should choose a reputable service provider and confirm the payment processing system is secure and compliant with industry standards. If you’re shopping for a new credit card processing company, Total Merchant Services offers a free quote to earn your business and a free credit card statement analysis to see where improvements and savings can be made. With a consultive approach, Total Merchant Services will assist any company in finding the best solution to streamline operations, enhance customer experience, and grow while staying within its budget.

In 2023, choosing the right merchant services company plays an integral role in the success of a business by providing a reliable and secure way to accept credit card payments from customers at affordable, competitive rates with a wide variety of equipment and point-of-sale options. By understanding the process and choosing the right provider, companies can offer their customers a seamless payment experience while managing transactions efficiently and accurately. Accepting credit card payments in a retail experience or online platform securely should be a breeze, and Total Merchant Services makes switching from another merchant services company extremely easy. We’re happy to help you get started today!