Credit Card Merchant Account Simplifies Online Transactions
If you like to receive credit card payments for your small business but are not sure how to initiate them. So this blog will provide you with the proper assistance. Credit card processing should be a regular part of your online business but not a source of stress. We wrote this blog to make it as easy as possible to get you set up for credit card processing.
CREDIT CARD MERCHANT
ACCOUNT AT A GLANCE
Credit card merchant account processing refers to the sequel of operations needed to process payments performed by using a credit card personally, online, via phone, or by mail.
Credit card merchant account typically costs a processing fee for every credit card payment you receive. Relying on your payment processor. So, you can be charged some additional fees depending on which pricing structure the payment processor uses.
There are three kinds
of credit card processing fees you should be familiar with.
- Interchange Fee. The interchange fee is a standard, non-navigable fee. That includes the costs of processing the transaction and the risk of payment authorization. And the risks of fraud and bad credit scores. Received by the customer’s issuing bank, the interchange fee is a percentage of the sale total with a set transaction fee that’s specified by each credit card network. Because this fee shows the highest cost of credit card payment processing and is generally affected by the kind of credit card involved in the transaction. And the average interchange fee in the U.S. is nearly 1.8% for credit cards and 0.3% for debit cards. But the exact cost a merchant will pay differs significantly. For instance, interchange fees on premium cards are actually higher.
- Assessment or Service Fee. This is another non-navigable fee but in this case.
The credit card network charges it. This fee is generally a minimum
percentage and can be impacted by your transaction ratio. And your risk
level is assessed or calculated by the credit card networks.
- Processing Fee. Every payment processor costs its own fees. Because it
refers to the payment processor markup. And it differs relying on the
pricing structure of the payment processor.
KINDS OF PAYMENT PROCESSOR PRICING STRUCTURE
There are four pricing structures you will have to be aware of when opting for a credit card merchant account provider.
- Flat Rate. The payment processor costs a fixed amount for all credit and debit card transactions despite the card used for payment. Note that card-present transactions usually have a lower flat rate as compared to card-not-present transactions. As they have less risk. This can be formed as an uncomplicated basic rate (for example, 2.9%). Or a basic rate along with a small per-transaction amount (for example, 2.9% + $0.30% transaction).
- Tiered Rate. The payment processor costs an amount on the basis of the credit card type used in the transaction, and how much risk is assessed with the transaction. And the whole transaction volume of the business. This structure is classified to be the most complicated and effectively most suspicious to merchants.
- Interchange Plus. An interchange plus structure is the most common pricing structure and is usually deemed the most transparent and cost-effective. Here, the merchant is charged a part of the transaction plus a fixed per-transaction cost. In this manner, the interchange part and the markup fee part are different and actually diverged. For instance, a $100 payment processed via a Visa Rewards credit card may carry a complete (effective) price of 2.13%, which consists of the interchange fee. The credit card network fee, or any other fees charged by the credit card merchant account.
- Subscription Rate. The payment processor costs a flat monthly service fee. Even with a small per-transaction fee. The wholesale fee is separate from the markup fee. It does not matter which pricing structure your business prefers. However, not all transactions can process at the same price. A qualified transaction costs a lower price than a non-qualified transaction.
OPTING FOR THE BEST CREDIT CARD MERCHANT ACCOUNT
Your credit card merchant account provider is essential for your online business as the banks you function with. However, you have a restaurant, salon, retail store, and institutions. And service providers promote the payment services that require you to be rock strong. But it is about more than just the fees or which brand’s cards you can accept. The best credit card merchant account for small business merchants offers a reliable, secure, cost-efficient service that you almost never have to think about.
As you specify which credit card merchant processor to
hire for your online business. We suggest you hold the following concerns in
your mind.
- The charges for credit card
processing.
- Credit card fraud protection
and security.
- Merchant services
- Customer service
- Additional support
CONCLUSION
Briefly, credit card processing may cost less per transaction. Also, provide a more flexible transaction limit and excellent customer service. And more advanced payment processing features and techniques. But the application and authorization procedure is basically more extensive and lengthy.
Businesses that have a high volume of sales, provide more products or services, or have a requirement for more customer and business support. You may want to specify a standard merchant services account. Moreover, the payment service provider delivers convenient onboarding. And which can be tempting to small businesses that want to get up and running faster without the obligation of going through the merchant account application procedure.
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