MERCHANT CREDIT CARD ACCOUNT PLAYERS

2007-03-08 10:33:40

( Business )



Commercial banks set up merchant credit card account to allow merchants to accept credit card payments from customers. The key players in setting up a merchant credit card account are the following: merchant, banks, credit card Company, and card processor network.

Merchant

Merchant applies for merchant credit card account to increase sales. Accepting credit card payments widens market reach particularly if you cater to traditional and online shopping. Consumers prefer to purchase through credit cards due to its convenience, portability and safety compared to cash.

Setting up a merchant credit card account requires good information and research to avoid costly processes. You need to know the usual terms and necessary tools in its set-up to prepare yourself on the task that you will handle in credit card merchant services. Merchants are legally liable to secure the credit card information of customers. Thus, it is necessary to find a reliable bank and card processor network to work with you in handling credit card transactions.

Bank

Banks handle financial processing of credit card transactions. It debits the amount of sale to the merchant’s account. Applying directly to the bank for a merchant credit card account is less costly since it will eliminate the services of brokers and its agents that overcharge application fees, set up fees, transaction fees and terminal fees.

Some banks broker your merchant credit card application to an Independent Service Organization, commonly known as ISO. Its work is to eliminate bank’s workload on application processing as well as bring clients to the banks for a fee. The bank instead purely focuses on financial processing of credit card sales transactions.

Credit Card Company

Credit Card Company gives its approval for the merchant to accept purchases from its credit card. Sometimes it’s the other way around, when the credit card company is the one seeking the merchant. The bank facilitates the process of approval. There is an already existing service agreement between the bank and the credit card company prior to the entry of the merchant. The bank formally includes the merchant in the agreement once the merchant’s application is approved. The bank acts as middleman particularly in the crediting and debiting of income between the merchant and the credit card company.

Card Processor Network

Card processor network processes all credit card transaction data. Data are compiled and assigned by categories for easy debiting and crediting of payments to the merchant, bank, and Credit Card Company.


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