All About Merchant Processing

Thinking about adding payment processing capabilities?

There’s a lot you should know.

There are countless reasons why a business should add credit card and electronic payment processing capabilities — transactional speed, convenience, increased customer satisfaction and loyalty, improved cash flow, views into sales data and more. But perhaps the most important consideration is the sheer volume of consumers who use non-cash methods as their primary form of payment.

In 2005, credit card and electronic transactions accounted for an overwhelming $3.4 trillion of total U.S. payments, according to The Nilson Report. That’s 50 percent of all transactions nationwide for that year! More recently, Visa USA estimated that nearly 60 percent of U.S. consumers aged 18 to 25 use cards as their primary payment method.

How Merchant Processing Works
Some form of the modern credit card has been in use since the late 19th century, mostly as department store charge cards representing lines of credit. Things have changed and today, the step a merchant needs to take in order to accept credit card payments is to establish a merchant account with a bank or third-party payment provider.

The necessity of merchant accounts
Some merchants prefer accepting credit cards because they are a much more convenient and cost effective way of collecting payments from customers. Other merchants, while it still may be convenient, struggle to pay the relatively high fees on their already- thin margins. Either way, merchants can make a number of improvements in their credit card processing by becoming more informed.

Providers of merchant accounts
If you want to get a new merchant account or switch from your existing provider, one thing is for sure: there is no shortage of companies that are anxious to earn your business. You can find merchant service providers by looking in the yellow pages, searching online, talking to your bank, or just waiting for the next sales person to either call you or walk into your business (which shouldn’t be long). The key is choosing the RIGHT provider for your business.
Did You Know?

U.S. Credit Card Penetration Rate: 81% of Households have at least one credit card!