![]() A processor that isn’t readily available or that has a poor track record of handling credit card disputes may be difficult to work with.Īnother key factor to consider is the cost associated with choosing a particular credit card processor. The best credit card processing companies support small businesses and essentially become their business partners. But if you want a processor who can help you expand your business, there are many factors that you’ll need to take into account.įor example, you’ll need to consider how well a certain processor might address any issues you have. If you’re a small business owner with a lot on your plate, you might be tempted to pick the first processing company you come across. What to Consider Before Choosing a Credit Card Processing Company And some target specific kinds of business owners like mobile vendors or online shop owners. Some processors perform both front-end and back-end functions. Back-end processing companies contact credit card issuers during the final stage (or the settlement stage) of the transaction process. Front-end processing companies typically deal with credit card and debit card authorization. Generally, there are two types of payment processors. They act as liaisons between merchants, banks and credit card issuers and may provide additional services to small businesses (like thwarting fraudulent activity). These businesses usually take on the responsibilities shouldered by merchants’ acquiring banks. What Is a Credit Card Processing Company?Ĭredit card processing companies are often involved in the process of completing credit card transactions. Then, the merchant receives its payment and the customer receives a bill. The issuer (and its credit card network) and the acquiring bank collect the fees the merchant owes them for processing credit card transactions. The merchant contacts the acquiring bank, which reaches out to the credit card issuer. If a customer is allowed to pay with a credit card, the transaction must be cleared and settled in order for the merchant to get paid. Then, the acquiring bank tells the merchant whether a credit card can be used to make a purchase. Once an issuer authorizes (or declines) a credit card, it contacts the acquiring bank. In the authorization stage, a merchant sends a credit card payment request to an acquiring bank that works with an issuer and its card network to process transactions. Through multiple stages, many different parties play a role in ensuring that credit card payments are authorized, cleared and settled. Several things happen when a customer dips or swipes a credit card. Before you can select a credit card processing company, it’s important to understand how credit card payments are processed. ![]()
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