If you’re like most businesses, you know that accepting credit cards is essential to your bottom line. But what you may not know is how credit card processing services actually work. Here’s a quick rundown of everything you need to know about credit card processing services, from the fees involved to the different types of services available.
First, let’s start with the basics: what are credit card processing services? Credit card processing services are businesses that provide merchants with the ability to accept credit and debit cards as payment for goods and services. These businesses typically charge a fee for their services, which can be either a percentage of each transaction or a flat rate per transaction.
There are two main types of credit card processing services: offline and online. Offline credit card processing services are provided by businesses that have a physical presence, such as retail stores or restaurants. Online credit card processing services, on the other hand, are provided by businesses that do not have a physical presence but instead operate entirely online.
Now that you know the basics of credit card processing services, let’s take a closer look at the fees involved. The most common fee charged by credit card processing businesses is called the interchange fee. This fee is a percentage of each transaction, and it goes to the credit card issuer (i.e., Visa, Mastercard, etc.). In addition to the interchange fee, businesses also have to pay a processing fee, which is typically a flat rate per transaction.
Altogether, the fees involved in credit card processing can vary depending on the business and the type of card being used. However, they typically range from 1-4% of the total transaction amount.
There are a few different types of credit card processing services available, so it’s important to choose the right one for your business. The most common type of service is called a merchant account. A merchant account allows businesses to accept credit and debit cards as payment.
Another type of credit card processing service is called an aggregator. An aggregator is a middleman between businesses and banks or credit card processors. Aggregators typically charge businesses a flat fee per transaction, and they often have lower interchange fees than merchant accounts.
Finally, there are prepaid cards, which are similar to gift cards. Prepaid cards can be used anywhere that credit cards are accepted, and they’re a good option for businesses that don’t want to set up a merchant account.
Now that you know the basics of credit card processing services, it’s time to choose the right one for your business. If you’re not sure where to start, we’ve got you covered with our comprehensive guide to credit card processing.
In this guide, we’ll cover everything you need to know about credit card processing services, from the fees involved to the different types of services available. We’ll also provide a side-by-side comparison of the top three merchant account providers, so you can find the best fit for your business.