Considering the buyer demographics, it is certainly a good idea to accept credit cards and electronic debit transactions via the Internet. Most consumers purchase the majority of items and services using plastic, so it simply makes good business sense to use a credit card processing function when selling online. Specialized merchant accounts allow business owners to accept credit card payments through a secure, encrypted processing operation.
Not only does a merchant account transfer funds from the consumer’s credit card to the business owner’s bank, it also ensures that the funds themselves are valid. This authorization process can be set up as a subsystem of the merchant account program or through a separate payment gateway.
How The Procedure Works
Businesses operating online have ordering pages that allow the consumer to choose what payment method to use. If a credit card is used to purchase goods or services, clicking on the order submission button engages the payment gateway software. The gateway takes the credit card number and payment amount, encrypts the information so that the transaction is secure, and verifies the credit card available balance.
The gateway is linked directly to the business owner’s Internet merchant account. The account can be set up with a commercial bank or other financial institution. The account processing center is much like a bank clearing house, meaning that the funds are captured and transferred to the business owner’s checking account.
Why This Service Is Important
In the modern era of virtual banking and funds transfer, consumers expect rapid payment processing. At the same time, business owners will feel comfortable accepting this type of payment only if funds verification is absolutely guaranteed. An Internet merchant account allows for automatic withdrawals and funds deposits without any activity required on the part of the business owner.
Most Internet merchant banks charge a small per-item or per-sale fee as well as a nominal commission percentage. The same is true with a payment gateway administrator. However, most reputable Internet merchant banks do not charge a commission unless the monthly fee totals exceed the actual flat rate.
With this type of account, business retailers and service providers have much more flexibility when it comes to point-of-sale. Not only can a merchant bank provide card swiping equipment for in-store purchases, it can also extend the service to include specialized apps that can be used to create an order authorization from anywhere the merchant is physically located, simply by using a cell phone. Of course, the greatest benefit of automated credit card processing is the reduced amount of time and labor spent by the goods and services provider.