For the majority of business owners there are two scenarios that led them to enter the realm of accepting credit cards. Some merchants have been operating by accepting only cash and check and as they have watched their business grow they have received more and more requests from customers to pay with their credit/debit card. Other merchants realize before opening their doors that the acceptance of plastic at their establishment is a necessity for their business model. Either way, the hunt for a credit card processor can be a labyrinth of confusing industry lingo, deceptive pricing plans or an all out attack of price matching guarantees. The bright side is, with a little bit of self-education on the practices of pricing and fee structures, merchants can quickly weed out the deceptive fly by night processors and choose a reputable company which will steer you in the right direction and help your business grow.
An entire book could be written on the lifespan of a credit card transaction but as a merchant you really just need to know the basics; a credit card is presented to your business by a customer, you swipe or enter the card information into a terminal or your point of sale system, a percentage of the sale (typically 2-4%) goes towards the multiple different organizations needed to process the payment, and the remaining balance is deposited into your bank account. The most important step of this process to the merchant is that tricky 2-4%. By understanding your pricing plan, interchange and your processing statement you can rest assured knowing you’re not getting ripped off by your current processor or if you are you can make a move to find a new one.
