Computer Credit Card Processing

Credit cards are a popular way for customers to make purchases, especially online, so most businesses need to be able to accept credit cards. There are many computer programs and services, called payment gateways, that help businesses with credit card processing, and if merchants understand how computer credit card processing works they can choose an option that fits their needs.

Accepting credit cards is important to the growth or success of most businesses, including those that operate out of stores, are online, or sell goods or services at temporary venues. Merchants often use third party payment gateways to process credit cards, but they can also do so through software that functions as a payment gateway using their own computer and Internet connection. The process may seem a little daunting at first, but by understanding how it works, merchants can decide if they want to process credit cards with their own software program or through a third party.

When a customer uses their credit card to make a purchase, they enter their credit card information by swiping the card or typing in the information. Most merchants use real-time credit card processing, which immediately sends a request over the Internet to the customer’s credit card company for an authorization. This verifies that the customer’s credit is good for the purchase, usually within a few seconds. For this you need an encrypted SSL connection so the customer’s information is secure.

At the end of each business day, batches of credit card payments are submitted by the merchant through the payment gateway, and the customers’ banks actually make the payments to the seller’s merchant account. This is a bank account specially designed to accept credit card payments, and a merchant must have some type of merchant account to process credit cards. Banks often hesitate to give these accounts to small or online businesses, so many businesses get a merchant account through a group called an independent sales organization, which is in the business of setting up merchant accounts.

The complicated part of this process is the actual processing of the credit card, the part that happens when the customer enters his or her information and the sale is authorized, and then when the batch is submitted and the payments are made to the merchant account. The payment gateway handles these transactions. Merchants can use a third party payment gateway to manage this process or buy software that does it for them through their own computer and internet connection.

Credit card processing costs merchants fees even if they use their own computer software to do so, because credit card companies charge fees for their services, as do the payment gateways that process the payments. There is usually a cost for the software or service, plus a monthly fee and minimum transaction amount for the payment gateway. Then, there is a percentage of the sale charged by the credit card companies, usually between about 2 percent and a little over 3 percent, with higher rates being charged for Internet purchases and lower rates for swiped cards. In addition to this, a flat rate is charged for each transaction, often around 30 cents.

In many cases payment gateways come with merchant accounts, shopping carts, or eCommerce web hosting packages, so it may not be necessary to get your own credit card processing software. In some cases it can be helpful, though, such as if you use QuickBooks and want to use their credit card processing software, or you want more hands-on control of your computer credit card processing. Some credit card processing software for your own computer will also allow you to use a portable card swiper for in-person transactions.

When choosing a payment gateway or credit card processing software program, consider:

• The cost of the program including all fees
• Its compatibility with your web site and merchant account
• Ease of use for yourself and for customers
• Which forms of payment are accepted
• What customer support is available

These questions will help you determine what form of computer credit card processing is right for your business.