METHODS TO PROCESS CREDIT CARDS


For a credit card transaction to be processed correctly it must be sent electronically to an acquiring bank.
The method of processing credit cards will vary by industry. A merchant account provider typically has the ability to sell or establish a means to process credit cards for a merchant.
A merchant account is required to accept credit cards using QuickCommerce. A merchant account is a special account with a bank that is a member of the Visa and MasterCard associations.


















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Such a bank has been certified by Visa and MasterCard associations and can provide you, the merchant, with all of the services related to your merchant account.

Once your merchant account is setup and " live " on the credit card system, you can accept credit cards from customers generally as follows:

A customer presents their credit card for payment.
Using their credit card number, you submit an electronic request to the processing network for "authorization to capture funds" from the cardholder's credit card account in the amount of the purchase. Traditionally, one would submit this request by swiping a credit card through an electronic transaction terminal provided by the bank.
With QuickCommerce, this request is provided electronically to our payment gateway servers, which then route the request along the processing network.

The processing network immediately receives your electronic request and determines if the cardholder's account is valid and if the funds are available. If they are, the processing network returns an electronic response to your terminal or computer. This response is called an "authorization code", and is your guaranteed authorization to capture the funds. Typically, this code is a six-digit number.

The transaction and its associated authorization are stored in a "batch", where other transactions for that day reside.

You print a receipt for the customer using the electronic terminal or your computer and the customer signs the receipt. As far as the customer is concerned, the transaction is complete. As far as you the merchant are concerned, there is one more step to complete the transaction.

At the end of your business day (usually), you submit a final request to the processing network to go ahead and "capture the funds" that you obtained authorizations for during the course of business that day. This is called "settlement" or "settling your batch". This request is also submitted using the electronic terminal or your computer. The processing network immediately receives your response electronically and determines if the capture amounts contained in your request match the authorizations for each item.

If so, the request is granted and an "Accepted" response is returned to your electronic terminal or computer. A settlement report can be printed showing the grand totals by card type (Visa, MasterCard, American Express, Discover, etc) for the settled batch. Note: any corrections to your batch, such as voiding a transaction, must be made prior to settlement.

Within 48 to 72 hours (usually), the funds associated with the batch you settled are deposited electronically into your business bank account. Typically, the discount rate you pay to your merchant account provider are deducted from the deposit before it transferred to your bank account, resulting in a "net deposit" of funds.

At the end of the month, your merchant account provider will mail a statement to you, detailing the credit card activity for the month and the associated fees you have been charged for such.

Now that you understand the basics of how a credit card merchant account works, you can see the role that QuickCommerce has in the processing of your credit card transactions.

Credit card terminal
A credit card terminal is a stand-alone piece of electronic equipment that allows a merchant to swipe or key-enter a credit card's information as well as additional information required to process a credit card transaction. A credit card terminal is a dedicated piece of equipment that only processes credit cards although it is common for related transactions including gift cards and check verification to also be performed. A credit card terminal typically must be plugged in to a power supply and connected to a telephone line. However, newer terminals may be powered by batteries and communicate over the Internet. Some credit card terminals are connected to the cellular network and communicate wirelessly. When a credit card is run through, it contacts the network to verify that the credit card can be charged. The actual billing of the charge is done at the end of day batch where all sales from the terminal of the day are sent out.

Most credit card terminals in current use consist of a modem, keypad, printer, magnetic stripe reader, power  supply and memory card.

A merchant accepting credit cards with a terminal in the United States will usually acquire that terminal in one of 4 ways. They may purchase  the terminal, rent the terminal, lease  the terminal or be offerred the  terminal at "no cost" in return for  contractual obligations from a merchant processor.

As with computers, there is a wide range of memory capacities and other features like built-in printers and debit card pinpads that affect the manufacturing cost of a credit card terminal.

Because of the general lack of knowledge regarding the cost of a credit card terminal, a business owner would be wise to make sure they are paying a fair price or making an acceptable contractual agreement before making a written commitment for procesing and/or a credit card terminal.

When a terminal is leased there is usually a 3rd party leasing company involved and it is not uncommon in many U.S. states for these leases to be non-cancellable.

As with any contractual agreement, a business owner should carefully review the terms and conditions before selecting a merchant processor and a credit card terminal. The written agreement will always apply no matter what the processor's representative or terminal seller might state verbally.

Automated Response Unit (ARU)
An ARU allows the manual keyed entry and subsequent authorization of a credit card over a cellular or land-line telephone. A business typically imprints their customer's card with an imprinter and then processes the transaction instantaneously over the phone.

Payment gateway
A payment gateway is an e-commerce service that authorizes payments for e-businesses and online retailers. It is the equivalent of a physical POS (point-of-sale) terminal located in most retail outlets. A merchant account provider is typically a separate company from the payment gateway. Some merchant account providers have their own payment gateways but the majority of companies use 3rd party payment gateways.

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