How It Works
A merchant account authorizes businesses to accept credit cards as a form of payment for their product or services.
When a customer's credit card is presented for payment:
1) The card is usually swiped through a terminal that reads the card's magnetic stripe, or the numbers are manually keyed into the terminal. Then the machine calls a processing service...
2) who then contacts the bank that issued the customer's credit card to see if the card is valid and if there is available credit to make the purchase. If there is, the amount is taken from the customer's balance and...
3) sent to our processing bank, who then deposits the money into the merchant's business checking account.
4) The merchant then receives monthly statements detailing all transactions. The actual transaction takes seconds, and the time it takes to get your money from time of sale is 48 hours.
You can authorize charges and post them for payment all at once. Or you can pre-authorize a card through some terminals, then post the transaction for payment into the terminal at a later time, (in case of off-premise sales or if the terminal is not responding). You can also Void or Refund transactions.
Since the terminal "reads" the magnetic stripe, the banking network knows the card is present, which greatly reduces the risk of disputes and possible chargebacks. You will receive the lowest rate for "qualified" transactions.
You can manually key in the credit card number if the card is not readable or not present, such as a worn magnetic stripe, off-premise sales keyed in at a later time, pre-authorized transactions, or mail / phone orders.
Address Verification (AVS) is available for telephone / mail order merchants so you can confirm the address you are shipping to is the address where the cardholder receives their statement. You may not want to ship if the address doesn't match, thereby reducing the risk of chargebacks due to customers claiming they did not receive the merchandise they ordered. Always try to obtain an imprint, with a signature, whenever possible.
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