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A FEW COMMON METHODS TO
PROCESS CREDIT CARDS
To run your business
successfully you need to accept credit
card payments from your customers.
Without this, most of your potential
customers will not make any purchases
from you unless you are selling
something that is highly exclusive.
However, processing of credit cards may
be highly confusing for beginners. There
are numerous methods by which credit
cards can be processed. Choosing a
method which is most beneficial for your
company is something that requires both
time and effort from you. Listed below
are some common methods that are
available in the market for you to
choose from.
Credit Card Terminal
These are small machines
usually black in colour found almost in
every retail store. Almost all the
retail stores and restaurants use this
mode to process credit cards from their
customers. Typically, the customer’s
card is swiped in the machine and the
machine will scan the magnetic strip of
the card to acquire the details of the
card holder. Then, the bank that issued
the card is contacted to verify the
details and a reply status is sent which
determines whether the transaction is
successful or not.
This is very simple
however; you should beware of several
hidden charges when you choose this
mode. Though the terminal might seem the
best mode for your business, you should
look more carefully once again for the
best mode.
Automated Response Unit
Many times it is
necessary for you to process credit
cards from consumers who place their
orders through the telephone. An ARU is
a device which accepts credit card
details from customers through their
phone. This is a good choice for those
companies that want to reduce the cost
of accepting credit cards.
Payment Gateway
Merchants who have online
businesses and want to accept credit
cards from customer’s can do so by
obtaining the payment gateway. When the
customer enters his information, it is
encrypted before being forwarded for
verification to the bank that issued the
card. The bank will respond with a
status message that either approves or
denies the request. The response
retraces the route which was taken by
the request message. Finally, the
website will receive the message and
action will be taken. The entire process
will only take few seconds to complete.
Tiered Level Purchasing
Cards
Purchasing cards are used
by companies to make payments to their
service providers or suppliers. This
method is preferred by most of the
companies since they find it to be very
convenient as it allows high volume
orders minus the extensive processing
work that was needed in the traditional
methods. A large company will purchase
several thousand items in a year. If it
followed the traditional method then the
company would have had to spend lots of
money for only the processing part. P –
Cards eliminate such extra effort.
Merchant Accounts
It is a contract between
any financial institution and the
business to accept payments through
credit cards. Effectively, it is like
the bank providing credit for the
business.
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