Finance is the elixir of life for businesses. It is the corner stone in the foundation of new enterprises, it allows multiple opportunities for growth, it favors expansion plans and it shields businesses from unforeseen, unfortunate circumstances. Money, therefore, should be managed well.
The first two steps towards managing business finances are:
1. Establishing a merchant account
2. Implementing a merchant processing agreement
Both these steps are prerequisites to get started with credit and debit card processing for your business. And, in today’s day and age, where people do not carry bundles of cash with them and where checks keep getting obsolete by the day, accepting card payments determines how advanced your business is.
What is a Merchant Account?
A merchant account is specialized to accommodate a merchant’s business needs by allowing him / her to accept debit cards, credit cards, gift cards and other modes of electronic payment made by customers for the merchant’s goods and / or services.
A merchant account involves 4 key players:
• The merchant
• The merchant’s financial institution in which he holds an account
• The customer
• The customer’s card issuer
So, when a customer buys a merchant’s goods and / or services by paying for it through an electronic medium (credit, debit or gift card) issued to him by his banking service, the transaction is passed on to the merchant’s financial institution for approval. Once the transaction is approved by the financial institution in which the merchant holds an account, the amount gets credited to his / her account.
Who is the Payment Processor?
The payment processor, the vital link in the merchant account circle, is the financial institution in which the merchant holds an account. A card processing company is usually a third party appointed by the merchant himself to manage credit card, debit card and gift card transactions. The merchant processing company or the payment processor oversees the transaction of fund removal from the credit cardholder’s account and fund deposition in the merchant account.
Why Should You Hire a Credit Card Processing Service?
Credit card processing services offer merchants a bunch of value added benefits for their merchant accounts. Choosing a reputed and experienced credit card processing service provider can be very beneficial to your business enterprise. Listed below are some of the benefits you can avail of upon hiring a card processing service.
• Merchant processing companies offer packages depending on the merchant’s business size and industry.
• The merchant need not be physically present to oversee any transaction as the credit card processing company handles the process.
• Hiring a card processing service helps you keep pace with the ever-changing payment industry.
• Accepting all types of electronic payments, such as mobile payments and online payments, is made possible.
• Frauds can be reduced due to the dismissal of bad checks and counterfeit notes.
• Merchant processing companies make tech support available 24 / 7.
The biggest boon of hiring a credit card processing company to manage business transactions is the freedom it allows you to focus completely on expanding your business.