Citibank Merchant Services Review

When you decide to set up a business, one of the first things you need is a merchant account. A merchant account enables you to accept credit card and debit card purchases. You want to accept these types of purchases because they are the most popular ways that customers make purchases these days. Indeed, few people use cash anymore, and even fewer use checks. Accepting credit cards is a must.

How a merchant accounts works

When you set up a merchant account, you set up to receive credit cards. Merchant account providers offer you the access to credit processing networks, and handle the mechanics of getting a card approved so that your transaction can go through. Here are the steps it takes for a credit or debit card transaction:

1. Customer offers his or her card. You enter the information from the card, either by typing it into the terminal or by swiping the card and getting the information from the magnetic strip on the card.
2. The data is transmitted, electronically, to the processing network. A request for funds is issued.
3. The credit card issuer or the banks that issued the debit card receives your request for payment. Still using an automatic, electronic system, the customer account is checked for funds.
4. Using codes, the bank or issuer decides whether or not there are sufficient funds for the transaction to go through. There is code issued for authorization, and a code for denial.
5. The code is transmitted back to the merchant. You are made aware of whether or not there are enough funds in the bank to cover the purchase.
6. When approval comes through, you print the receipt for the customer.  (It’s amazing that this whole process can take only a few seconds.)
7. The transactions are actually settled at the end of the day. A hold might be placed on the customer’s account, saving that money out for you, but it is not officially charged. A batch settling process happens at the end of the day to make sure all the transactions have the proper code.
8. Final approval comes from the banks and issuers, settling the final amount. Only then are accounts reduced by the amount of purchases made.
9. Funds are deposited into your account. However, it can take a few days for the amount to be fully credited to your business account.

You should note that a merchant account always charges fees. A portion of each transaction goes to the merchant account provider for the service of processing the transaction. Before you make a decision about who to go with, it is a good idea to find out what the fee are.

Citibank merchant services

Citibank has a small business section devoted to helping small businesses succeed. However, its payment processing services are offered through FirstData. If you want a Citibank merchant account, you will actually get a FirstData merchant account. This is not necessarily a bad thing. It means that Citi would prefer to turn over some of the logistics of payment processing to someone else who does a good job of it. The fact that Citi still offers these services, even through a third party, means that it is possible to fulfill most of your business needs in one place.