If you’ve ever purchased anything online or in person, you’ve most likely used credit card processing. This is the service that allows you to swipe your card with a merchant or use it online. Payment processors are integral parts of ecommerce and brick-and-mortar businesses alike, helping them process payments from clients quickly, effectively and securely.
Credit card processing is a way to pay for goods or services with a credit or debit card. When you make a purchase, the credit card processing company (like Visa or Mastercard) will handle the payment between the merchant and your bank.
How Does Credit Card Processing Work?
Credit card processing is a fairly simple process, but it’s important to understand how it works in order to use it safely and effectively. When you make a purchase, the credit card processing company will handle the payment between the merchant and your bank.
The first step is for the customer to provide their credit card information to the merchant. The merchant will then forward this information to the credit card processing company, which will verify the card’s validity and check if there is a sufficient credit line available to make the purchase. If everything checks out, the merchant will process your request for payment.
How Are Charges Billed?
The money from a credit card purchase is transferred electronically from the customer’s bank account to the merchant’s bank account. This process usually happens immediately, but it may take a day or two for the funds to be transferred.
Credit card processing charges are billed in a few different ways, but the most common is through a flat fee plus a percentage of each transaction. For example, a merchant might pay 2.5% of each purchase plus $0.10 (for a total of 2.6% of the purchase price) to process credit and debit cards.
The fees for credit card processing can vary by over 1,000%, so it’s important to research the rates before you sign up with a payment processor. You should also look at factors like equipment costs and other services offered before making a final decision.
What Happens If Someone Makes A Fraudulent Purchase Using Your Card?
If someone makes an online purchase with your credit card, the liability is typically on you as long as it is reported in a timely manner. However, if the merchant stores your card information or does not use SSL encryption when handling transactions, you may be liable for fraudulent charges even if you report them.
It’s important to keep an eye on your credit card statements and report any unauthorized charges as soon as possible. Most credit card processing companies offer fraud protection, but it’s still best to take precautions to avoid becoming a victim in the first place.
Credit card processing is a safe and convenient way to pay for the things you need. By understanding how it works, you can use it safely and effectively in your everyday life.
