If we are honest, credit card processing is not that complex. But there is a difference in how things are handled between small brokerages to large franchise networks with hundreds of offices. This is simply because of the difference in the size of technical human resources.
For the small to medium-sized brokerages or developments, often the approval to perform as a merchant account proves difficult. Add to it the fact that you will have to work with updated technology on a daily basis and keep up with the security protocols. Yes, the task might seem harrowing for some.
There is a solution for it though. It is the hiring of a third-party agency to do all the necessary card processing for your company. All you need to do is invest in an expert credit card processing firm like the Nadapayments. With that in mind, the following section of the article lists everything you need to consider as a business owner before signing up with a credit card processing service.
Understanding the language
When you are dealing with credit cards, you will need to know and understand the actual lingo in use. Yes, a lot of the time will get spent on the actual setting up and the running of the systems, but it is still a great idea to understand the credit card jargon. This will enable you to make sure of the movement of money as well as transaction. This will save you should future headaches crop up. But first, you need to take stock of the four major players when it comes to credit card processing.
These are the financial institutions that are responsible for providing transaction services between individuals and bank accounts. However, the merchant banks are vastly different from online aggregators. Aggregators might process credit card transactions but aren’t financial institutions like banks.
A credit card processor
A credit card processor is the third-party or the middleman that performs the duty of the merchant bank by facilitating the transfers, transactions through credit cards, routing of card information and the payment network for the merchant accounts.
The issuing bank
These are the banks that are responsible for issuing credit cards to individuals.
Card payment brands
These are the branded cards that are issued by various services and detailed information about them can be found online.
Now, to find the right processor
It makes no sense to think that since you are a small-time brokerage or development, you won’t have much credit card processing workload. Your revenue generation is entirely dependent on the type of business you run, how you conduct, your location and your ability to streamline everything. You might have a mobile business, and you are always on the go, jet-setting to various locations for trade shows. For conducting business on the go, all you need is a mobile credit card processor. Or you might be in the rental/leasing business which means you will need a shared point-of-sale or the POS to integrate credit card transactions with your Customer Relationship Management (CRM) software.
About revenue requirements
Yes, there are options available, but the truth is that it is very challenging to meet the requirements of the vendor. When the business doesn’t generate revenue the credit card processing firm will reject your application. The base revenue requirement for a credit card processing firm is about $10,000 monthly. However, if your company doesn’t generate enough revenue, there are still options available for you. A thorough online search will list all the firms that you should look into.
About data security
When it comes to data security, it doesn’t matter what the size of the firm is. Be it the modest, small-time company or the multinational conglomerate, the fact about data security and safety of customer data is the top priority. All you need to do is ensure maximum protection for the customer data and the stored data when individuals use credit cards for purchase or deposits. This is even more so if you are going to hand over all the data to a third-party processing agency. There are specific industry standard protocols and security measures that you need to invest in and right now. The first is the Payment Card Industry or the PCI, along with the 3-digit CVV or the Credit Card Verification Value, the SSL protocol or the Secured Sockets Layer and the E2EE or the End-To-End encryption. There are other security protocols to factor in as well that include the TLS (Transport Layer Security) v1.1 or 1.2.
About credit card fees
Various fees are included when you look to invest in a third-party credit card processing firm. The calculation of this cost can seem like rocket science as several fees are associated. This is where it gets tricky for the small to medium-sized agencies. Many will voice a concern that the cost will cut into the profit margins. Well, the following is the list of all the expenses that you will have to bear when investing in outsourcing a card processing service.
The payment gateway fee
These are like the terminal fees a customer needs to pay. Here you will pay to process the customer information and the charges may vary depending on the service you choose.
The statement fees
Some fees will get charged for the printing and the mailing of the credit card statement and other associated details. The cost is a standard 10 dollars per transaction, but you can find services that charge as low as $5 per transaction as well.
The monthly minimum fee
This is the fee that will get charged if you as the merchant do not reach the transactional total for the year or a month as per your contract rules. The actual fee may vary from service to service, but you will have to pay extra if you do not meet the minimum transaction.
Average discount rates fee
This is the percentage of the sale the credit card processing service will keep as a charge for their services.
This is the fixed dollar amount that will get charged per transaction.
Address verification service fee
This is for merchants who will need to pay an extra charge for address verification per transaction.
Hire your expert only after careful consideration of all the necessary details and enjoy the maximum benefits of credit card processing.