Find quick and useful ways to start processing credit cards without the hassle of working with a big bank. Our dedicated account managers will help you with approval, underwriting, setup, and security so you can start processing cards in no time.
Credit card processing is the process that allows your customers to pay you via card payments. Specifically, it’s the series of events that happen between a customer swiping their debit or credit card and you receiving the payment in your business bank account. This process applies for cards accepted in-person, online, or over the phone.
To accept cards, you’ll need a credit card processor. There are many different types of credit card processors, but the three most common are banks, independent sales organizations (ISOs), and merchant service providers (MSPs). Merchant service providers (MSPs) typically have the most flexible requirements and the lowest rates and fees.
No matter what kind of business you run, you can process card payments smoothly when working with an experienced and recognized merchant service provider. We pick the tools and solutions that work for your business in order to run more efficiently, safely, and quickly.
To process credit cards, you'll need a merchant account. There are hundreds of options available when it comes to choosing a merchant service provider.
From EMV and PCI compliance to encryption, SSL's, and more, access the technology that helps you keep your business’ and customers’ information safe.
Deciding to process credit cards is a big step for your business and opens up a whole new world of possibilities. As a small business owner, find relief knowing you can access customers not only in your city, but across the world. Find out why business owners are choosing PaymentCloud:
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Credit card processing is more intricate than it seems. To the cashier or customer, it appears the card is either approved or denied: the end. But it is far more complex than meets the eye.
Now that we’ve explored who is involved in processing a transaction, let’s walk through the process and discuss the roles each party plays.
Processing a credit card takes mere seconds, but there are several parties involved in the process.
The customer (the cardholder) swipes/taps/inserts their card to pay for a transaction at the business (the merchant) and starts the credit card payment process.
Next, the merchant accepts and collects the cardholder’s payment information in person, online, or over the phone.
The merchant either manually or automatically sends the funds directly to the payment processor via the processing equipment: online through a payment gateway, or keyed in through a virtual terminal.
The network sends the transaction information to the customer’s bank (the issuer). The issuer then verifies the bank’s records match the information provided and the cardholder has enough money in their account to proceed. The processor checks for any signs of fraud and runs a data security scan.
The issuer notifies the processor, who then sends an “approved” message if everything checks out. If the information is incomplete, inaccurate, or the available balance doesn’t cover the purchase, the processor is notified and sends a “declined” message.
This entire process, to this point, takes mere seconds.
Receiving an approval message only half completes the transaction. It’s enough to let the customer take their purchase out of the store, but the merchant hasn’t been paid yet. The customer sees an authorization (or a pending charge) on their bank statement. This process freezes the funds so they cannot be used.
To get the money out of the customer’s bank account and into the merchant’s, the merchant must automatically or manually close the batch, or group of transactions. A merchant can close batches manually to include any number of transactions, or set them to close automatically in a given time period. Particularly, 24 hours is the common closing cycle for batches.
Once the merchant has closed the batch, they’ve indicated to the processor that the transactions in the given batch are true, complete, and accurate.
That processor then routes the money over the network between the customer’s bank account (issuing bank) and the merchant’s (acquiring bank). The transaction is complete.
Our application and set up process makes it easy to get set up to start processing credit cards
Now you know who the parties are and how the steps work in processing a credit card transaction. Now, let’s talk about fees. We will touch on some of the more common fees below, but for an in depth breakdown, check out our complete guide on credit card processing fees.
Your monthly bill from your processor has these major categories:
Payment Processors use several different pricing models to collect fees each month. As a result, your pricing structure and the complete cost you pay (anywhere from 2-4% on average) will vary. This depends on your business model, the inherent riskiness of your industry, credit card acceptance method, and more.
Note : Payment service providers—such as Stripe, Square, and PayPal—only offer flat-rate pricing, which is not the most cost effective option for most businesses. At PaymentCloud, we examine every detail of your processing history to ensure you’re on the pricing plan most favorable for your particular business.
So what are your equipment options for processing credit card transactions? You connect to your payment processor through relevant credit card readers, so it’s an important consideration.
Your choice of equipment will depend on a few factors:
Point of Sale software systems (or POS solutions) are the gold standard in restaurants and retail locations. They handle credit card payment processing as a small part of their function. They can also help manage inventory and coordinate between the front and back of the house.
Not to mention, they’re perfect for collecting customer information for long-term retention. They come in many forms, so make sure to dig into your research on a POS system before purchasing. This will ensure it has all the features you need to run and scale your business.
Virtual terminals are credit card payment processing software that run completely online. Because of this, you can access them by logging into a secure portal (or online payment interface) from any internet-connected device. A virtual terminal allows you to quickly process single (as well as recurring ) transactions directly through your portal. You are the one in control of entering the card data. This is most common with mail order, telephone order (MOTO) businesses.
This is often confused with a virtual terminal because they’re used interchangeably, but there are many key differences between virtual terminals and payment gateways.
A payment gateway provider such as Authorize.net attaches the technology that captures and sends encrypted transaction data from the customer to the acquirer to an online checkout page on a website. It verifies that the payment is not fraudulent and can even handle recurring billing, chargeback reduction, and PCI compliance.
Mobile or wireless terminals have become increasingly popular in retail environments due to their ease-of-use and portability. Mobile is often used interchangeably to describe the app-based process where your smartphone becomes the terminal. To access, you log into an account from your device within an app.
It connects you to your processor to process transactions. These transactions have two options. You can either manually key them into the app or swipe/tap/dip them through physical hardware attached to your smartphone.
A wireless terminal is similar to a countertop terminal (the traditional machine you’ll still see on countertops), yet they are wireless and don’t require any cords. Wireless terminals operate via a rechargeable battery, so charging is easy. Secondly, they connect to the Internet through either WiFi or a 3G/4G subscription to process transactions. This process is similar to a traditional countertop terminal.
EMV is a credit or debit card with an embedded security chip. This technology replaced the magnetic stripe on the back of cards as a more secure alternative. Moreover, to reduce storing direct information on your device, EMV tokenizes (or encrypts) customers’ card data. Make sure to employ best practices when storing credit card information.
An EMV Terminal is a traditional countertop terminal (or credit card machine) that processes payments utilizing that chip.
If you have or plan to start an eCommerce business , you’ll need an online shopping cart to make it run. An online shopping cart utilizes a virtual terminal on the backend to create a front-end store your customers can use to buy items. Because of this, it allows your customers to make purchases without your direct involvement.
Apply now for a merchant account and start processing credit cards as soon as tomorrow.
You should now be familiar with how to accept credit card payments for your business. Next, let’s talk about how to find the right processor for your business. Choosing from the multitude of credit card processing companies is one of the most important choices you’ll make in growing your business.
While cost is important, it’s equally crucial to consider a credit card processing company. Consider who picks up the phone when you call with an issue and is compatible with your business and equipment needs. And most importantly, focus on keeping your business transactions secure.
Your credit card processor is your merchant services provider. Accordingly, merchant services is a term that encompasses a wide range of business financial services. The most common of which is credit card processing.
It may also, depending on your business, include things like ACH (automated clearing house) transactions or electronic checks. Not to mention physical check processing, gift card, loyalty programs , etc.
Along with the merchant services offered by a credit card processor, there are more services they may offer. These include things like:
Many payment processors offer integrations with other service providers. Further, this ensures you have the most comprehensive solutions available to you. If there’s a service you need that your credit card processor doesn’t offer, check with them for any relevant integrations that they have available.
PCI Compliance (also known as PCI DSS compliance) is adherence to a set of comprehensive security standards set by the PCI Security Standards Council. They aim to reduce fraud and related costs for businesses around the globe utilizing credit card processing. Failing to meet these standards may come with exorbitant costs, so this is an important one.
You’ll want a credit card payment processor that is both compliant with these standards themselves as well as willing/able to help you certify your compliance.
Accepting credit cards does come with a set of risks that you need to consider. For example, a transaction completed fraudulently at your store without your due diligence is a risk. One that may result in your loss of both the merchandise/service and the money rendered for it. This is because cardholders have protection from fraud.
The true cardholder can dispute transactions with their bank and issue a chargeback. Indeed, this process is essentially a mini court case surrounding the transaction. Your business practices and the industry you operate in impact your rate of chargebacks. Industries or businesses that are considered high risk are more affected by chargebacks and fraud.
Having a merchant service provider who is looking out for your best interest is key. It will also help reduce your risks of fraud and chargebacks while doing business. It will save you time and money in the long run with credit card processing.
Our PCI-compliant payment gateways can be automated to effortlessly protect against fraud and mitigate the likelihood of chargebacks with integrations including:
At PaymentCloud, we provide the best of both worlds by customizing payment channels to provide maximum security, reducing the risk of chargebacks and fraud without deterring legitimate sales.
No solution is perfect. Sometimes the power goes out, your terminal malfunctions or a point-of-sale system unexpectedly goes offline. Finding a payment processor that has responsive customer support when you need them will make all the difference.
Accepting credit cards is essential for your business. Therefore, we hope you feel empowered to sort through credit card processing companies to find the right partner for your business and understand it a bit better after reading through this complete guide to credit card processing.
Contact our team at PaymentCloud to discuss your business needs. In fact, we just might be the right solution for your business’ credit card payment processing needs.
Apply in as little as 5 minutes and you will receive a call from one of our trained representatives within 24 hours to get you set up for credit card processing.
Serious merchants turn to PaymentCloud. With a proud average of 4.8 stars across all review sites, PaymentCloud is excelling in solutions and support. But don’t take our word for it! Here’s what our merchants have to say:
From day one, Miles has been an overwhelming help to me in making sure I am making the best choices for building my business. His patience with me as he helped me step by step in submitting my application was so appreciated! …The team has been amazing across the board, and I truly cannot thank them enough!
I've been working with the folks at PaymentCloud for about two weeks now. They have made it super easy and they guide you through everything! Their customer service and support is awesome! I'm so glad that we connected with Michael S. and all the other folks at PaymentCloud. Highly recommend!
The agent who helped me to onboard was attentive and consistent throughout the process... They made sure I knew how to manage my accounts and had them properly set up and in compliance. They turned what could’ve been an intimidating process riddled with errors into a smooth transition for my business.