Let’s say that a customer want to spend $100 for an item and pays with a credit card. Once the buy button is pressed, several companies will play a role in the transaction – around $3 are charged in this interaction in the form of fees. (Actual fees charged will vary, depending on factors like type of card, merchant type and risk factors involved).
The first stop is the payment gateway (charges .10¢) which then sends the customer to the right credit card processor (.08¢ to be routed to Visa, MasterCard or Amex portals). The processor will then pass the customer onto the next step – the credit card interchange (.09¢). After clearing the interchange, the next step is the issuing bank (1.93¢), whose job it is to verify that funds are available in a customer’s card account. The issuing bank checks other information like number of the card, expiry date, validating billing address, the CVV number and amount to be paid.
Whether the transaction is approved or not, that becomes a secondary thing – meanwhile it is the journey that is made right back to the customer. If the transaction is approved, authorization takes place and the steps go right back to the customer to let them know. The detour takes a customer to the merchant account at the bank receiving the money (.65¢). The net amount is actually $97.15 after the entire transaction is enacted.
The transaction process for High Risk Solutions remains the same for all acquiring companies. Most credit card processor servicing companies work on consolidating vendors and shortening the process. Many companies act as the payment getaway and the processing company, cutting out 3rd party gateways in the payment routing process. This speeds up the process, while providing secure gateways. Many process companies also offer a wide range of products like mobile apps, wireless applications as well as equipment and special paper etc. This makes it easy for merchants to contact one vendor and get a single billing statement as well as comprehensive assistance.
Can a merchant use credit card processing as well as check processing services?
Merchants can sign up for both facilities with their credit card processor service companies. Merchants can combine different services like credit and debit cards, checks and also internet processing.