How to choose the best credit card processor? This is a question that every company considering accepting credit cards must answer. It is an important one, too. As you probably know, there are hundreds of companies out there who would love to get their hands on your business. While some may charge more than others for their services, many will claim they can offer exactly what you need at an unbeatable price. Sadly, no two companies are the same, and just because one offers something at discounts does not mean it’s actually worth it in the long run.
When choosing the best credit card processor make sure you compare options like customer service, rates, and fees (including equipment), security requirements (for both merchant and processor), and available features; read everything carefully. When in doubt, ask questions. It’s hard to go wrong if you are well informed and careful about what you sign up for. So, let’s take a closer look at some of the basics you should investigate before making your choice.
How does credit card processing work?
Credit card processing was originally designed as an electronic payment system that allows customers to purchase goods or services using their credit cards. When a customer wants to pay with his/her credit card, he/she swipes it through a machine that reads the information on the magnetic strip on its face (and sometimes even the signature panel). The data is transmitted electronically over phone lines (or the Internet) and routed through several computers before arriving at the merchant account provider.
This data is then transformed into a unique authorization code. The merchant account provider will then authorize or decline the transaction and forward the information along to a settlement bank that processes all credit card transactions. This bank then ushers the money from both the merchant and issuer accounts together, where it awaits deposit. Each stage of this procedure incurs a fee which you must know before signing up for any services.