Credit Card Processing

By Eric Michaels

The ability to process credit cards is a necessity in today's business world. When you begin to research the different credit card processing methods, it can seem overwhelming. You will need to decide how you want to process credit cards for purchases. Be sure to choose the method that will work best for your business type and sales volume.

Third party vendor

A third party vendor will accept credit card payments on your behalf and send your payments directly to you. This secure, online method of processing payments is growing fast, as a result of e-commerce sites. With a third party vendor, your customer's data is protected during the processing, while you are afforded a money saving approach to credit card processing. The money you save is a result of the decrease in the amount of charge backs from your customer's cards.

Most third party vendors will provide unlimited transactions, while charging a one-time set up fee, along with monthly usage fees. PayPal, and Volusion, are two of the top vendors for online processing. A third party vendor is the safest way to start accepting credit cards for purchases. If your business needs to accept credit cards online, this may be a wise choice for you.

Merchant account

In order to process your customer's credit cards, you will need to select a bank and open a merchant account. The approval process may be difficult if you are a new business, with no credit history. Once approved by the bank, you will be ready to start processing credit cards.

The start up costs of a merchant account can be rather expensive. In addition, the risks of fraud and charge backs are something to consider. The initial set up for this processing method may be time consuming. However, it may be ideal for your business if you anticipate high volume in sales.

Automated response unit (ARU)

This processing method allows your customers to share their credit card information in-person, or over the phone and verbally authorize transactions. An automated response unit is popular among vendors and small businesses, as a credit card machine is not required at the point of sale.

When accepting credit cards using this method, you will still be required to be PCI compliant. If your business has low volume requirements and does not seek to integrate with an e-commerce site, this secure, processing method is a good solution.

In today's retail market, fewer customers carry cash, and credit card companies continue to entice customers with rewards programs. It's clear that credit card processing is a beneficial practice for your business.