Different Methods to Process Credit Cards

Jul 21, 2016 by

Different Methods to Process Credit Cards

Running a cash only business has several drawbacks. For one, you can’t accept any credit card payments, which automatically excludes a large segment of the population. Cash businesses can also be difficult to perform bookkeeping for. In addition, these businesses are also higher targets for theft because thieves know they can get a payout for their efforts.

That’s why more businesses are turning to a credit card merchant account to help manage payments for their businesses. These kinds of accounts offer more options to send and receive money on or offline.


Credit card processors handle transactions that are completed in store. When a customer wants to slide his or her card to complete a payment, he or she does so through a credit card terminal. These terminals are connected to the Internet and encrypt transaction data. Some terminals are battery powered, but most run off of some kind of external power supply.

The job of a terminal is to connect with the network and transfer money to and from a bank.

Payment Gateway

Online credit card processing requires a payment gateway. This service is specifically for e-commerce, and it’s the basic equivalent of the point of sale terminal in a store. When you’re shopping for merchant account providers, be sure to ask about whether they own the gateway or license from a third party. If they own the gateway, you might be looking at substantial savings for using the services.

Usually, a payment gateway is implemented on a website via the gateway’s API code. API is code that is designed to work with most websites.

Voice Authorization

Bigger businesses often utilize some form of automated response unit, which is designed to capture credit card information over a cellular device. This has become increasingly important over the years, and consumers have learned to trust paying over the phone. Transactions usually process instantaneously, and modern systems have the ability to provide receipts via email or some other transmission.

Final Notes

All of the above rely on a merchant account provider to facilitate the transaction. It might seem like a good idea to go directly to a major bank for this kind of service, but that may not always be the case. Banks often contract these systems out to third parties and pass the costs along to businesses.

When you’re shopping for a good rate, look for interchange-plus model rates structures. This tier provides variable fees that usually work out to be less money out of your pocket.
Charge.com Payment Solutions, Inc. offers affordable rates and efficient payment processing for businesses of all sizes.

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