What you need to Know about Merchant Processing

Finding an honest and affordable Merchant Processor is not as easy as you might think. Many of our competitors hide their information so it is incredibly difficult to find and once you do, it can be complex and confusing. This is often the case because your credit card processor didn’t fill you in on exactly what merchant processing is or how many different companies get a chunk of the transaction amount. Here at CardPRO Systems, Inc. in Ogden, UT, we educate our clients and help guide them through the process and make the whole thing much simpler and less convoluted. Here is what you need to know about merchant processing before you sign a contract with one of the other guys.

Who is Involved?

The first thing you should realize about credit card processing services is that there are four parties involved in each and every transaction. Obviously the first two are the merchant and the customer, but behind each of these parties is a bank that requires a fee for the transaction. The bank that issued the card to the customer is the issuing bank and the bank that the merchant uses to process credit cards is the acquiring bank.

Fees

Both the issuing bank and the acquiring bank have fees that are deducted from the transaction. The issuing bank charges an interchange fee while the acquiring bank’s fee is referred to as a discount rate. Because the banks take these fees from every transaction, the amount of money the merchant receives from the transaction is less than the amount the customer paid for. Sometimes interchange rates can vary depending on the line of service the merchant is in. Merchants that are in ‘safer’ businesses, like gas stations and restaurants, tend to get more favorable interchange rates.

Interchange rates can also vary depending on other factors, like whether or not the cardholder is present during the transaction. From the perspective of both the issuing bank and the acquiring bank, the safest transactions are the ones where the cardholder is present and able to sign for the service. Over the phone and online purchases are considered more risky because of the increased likelihood that the cardholder will dispute the charge and could have higher intercharge rates.

CardPRO Systems would be glad to help any Utah business with their merchant processing needs, especially those in Ogden, Clearfield, Layton, Farmington, and Bountiful, Utah. If you are interested in our Merchant Processing Services, you can contact our Ogden, UT office here or give us a call at 844-385-2273 and get started today!