Card Payment Basics

In today’s marketplace, merchants are faced with a complex set of terminology and conflicting information when they look to set-up their payment processing options.  In addition the payment card industry as well as the federal government are constantly changing rules and regulations when it comes to taking payment.

How a Payment Card Transaction Works:

1. A cardholder purchases goods or services from a merchant.
2. The merchant sends the transaction information to an Acquirer (Merchant Bank) and is reimbursed for the sale less a discount rate.
3. The Acquirer submits the transaction to the Issuing Bank for payment by either the MasterCard or Visa settlement system.
4. The Issuer pays the Acquirer for the purchase through the settlement system
5. The cardholder repays the Issuer for the goods or services originally purchased from the merchant.

Below illustrates the process flow of a typical credit card transaction

Merchants, large and small, established and brand new, benefit from accepting payment cards and telling their customers about it:

Increased Sales – Customers spend more when they have options besides cash.  An old truism says that the more ways you give a customer to pay, the more money you make.  Customers paying with payment cards typically spend more.  And the cost of accepting card payments is paid for and increases profit by the increase in gross sales.  In other words, your business will enjoy higher average tickets and additional purchases that might not otherwise have been made.

Customer Satisfaction Today’s customers demand the flexibility to pay

• How
• Where
• When they want.

Electronic transactions save you time and money by…

• Automating manual store procedures
• Speeding checkout lines
• Providing better customer service
• Increasing cash flow
• Offering higher profits

Whether it’s by debit or credit card or a specialty product, happy customers will be loyal customers.

Safety and Slippage Electronic payments keep cash-on-hand at a minimum and reduce the opportunity for clerical mistakes and pilfering.