Any business that accepts credit card payments needs a reliable payment processor with a solid customer service team. The best credit card processors offer transparent pricing, few or no fees and flexible terms.

Whether it’s an equipment failure or a transaction error, every business has issues that require technical support. The top merchant services providers provide customer technical support that’s fast and responsive.

What is Credit Card Processing?

Credit card processing is a series of operations that enables businesses to accept debit and credit cards for payment. It includes everything from the moment a customer swipes or inserts a card in a point of sale device to when funds are deposited into their business bank account. The process is facilitated by merchant services providers (also called merchant processors or acquirers) that act as the bridge between businesses and credit card networks.

When choosing a merchant services provider, small business owners must consider rates, fees and equipment costs. The most competitive credit card processors offer transparent and flat rates, few or no fees and flexible terms. They also provide a wide range of POS, reporting and e-commerce features to support any type of business.

Some providers offer bundled services, including a payment gateway and merchant account, which simplifies the setup and management of a business’s payments. Others charge monthly fees for a basic plan that covers these essential services. Tiered plans separate transaction fees into three groups, including qualified, mid-qualified and non-qualified tiers. These tiers are based on the type of credit card used and the industry. The best credit card processing companies will explain these rates and fees to help their clients make an informed decision. They will also help their clients choose the best equipment for their specific needs.

Who is Involved in Card Processing?

Credit card processing involves a wide range of stakeholders, including the merchant, the customer, and the payment processor. The merchant processes payments from customers by swiping, inserting, or tapping the customer’s card into a point-of-sale terminal or credit card reader. The card is then sent to the payment processor for authorization, where the card is validated and funds are transferred to the business’s bank account.

The payments process also involves a payment gateway, which connects the merchant’s business to the payment processor and the card network. Some payment gateways work with all major cards, while others specialize in specific types of transactions, such as online shopping or mobile payments. A good payment gateway should have a robust, transparent pricing model with clear markups and fees that are easily readable.

Whether a business has an online store, brick-and-mortar shop, or is in a highly-regulated industry like telecommunications or banking, it is likely to encounter problems with the payment system from time to time. That’s why it’s important for business owners to evaluate the ease with which they can get help when they need it. If a customer service team is unable to resolve issues quickly or provide solutions that are effective, it might not be worth the hassle. In this case, the business should look for a more reliable payment processor.

What Are the Fees for Card Processing?

The fees associated with credit card processing are often a hidden cost of running a small business, but understanding how they work and knowing how to lower them is essential. On average, merchants pay 1.5% to 3.5% of the total transaction for in-person swiped sales, or even more for online transactions (due to higher fraud risk).

Typically, these costs are split into multiple categories: Interchange fee: A payment made directly to the issuing bank on each processed sale. This fee is non-negotiable. Assessment fee: A fee passed on to the card networks by the merchant account provider for each transaction. Examples of these fees are Visa’s Fixed Acquirer Network Fee and Mastercard’s Kilobyte Access Fee.

A monthly fee that covers customer service, statement preparation and other administrative costs. A monthly charge for the use of the business’s payment gateway – an online software system used to process payments. A monthly fee that covers PCI compliance and other security measures. A monthly fee that covers the lease of a credit card terminal.

Choosing the right merchant services provider for your business can dramatically reduce these fees. Be wary of providers that offer flat rate pricing — this model eliminates the opportunity to negotiate lower interchange rates and can end up being much more expensive. Instead, look for a processor that offers transparent and negotiable markup rates over standard interchange fees.

What is a High Risk Merchant Account?

Some payment processors categorize businesses into low risk and high risk merchant accounts. This categorization is determined by how a business processes credit card payments, and can be based on chargeback history or other factors. High risk merchant accounts tend to have higher fees than those of regular accounts.

A chargeback is when a customer calls their bank and complains about the product or service they purchased from you. They may claim a clerical error or that something was wrong with the quality of the product. More serious chargebacks can indicate that you have engaged in friendly fraud, which involves lying to a customer in order to get them to refund their money.

If you operate a high-risk business, you can use a high risk merchant account to protect your customers' funds. These accounts usually have a higher fee structure than those of regular merchant accounts, but can be a great option for businesses that are at high risk for chargebacks and fraud. It's important to choose a high-risk merchant account provider that can accommodate your unique needs. Look for a provider that works with your industry and the countries where you operate, as well as offers anti-fraud tools. You should also choose a provider that is transparent about their services and fees. You don't want to be caught in a scam that leads to your account being frozen or terminated.

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