Merchant Services

Are you starting up a new online business? Or looking to improve your company’s online payment processing system? Merchant account providers, also known as independent service organizations (ISO’s), offer online payment processing services to meet your business needs. First, your ISO will open a merchant account for you at a financial institution so that your business can process Internet transactions. Next, you will be able to choose from the many merchant services available on the market today, including credit card processing, debit / ATM card processing and e-Checks and escrow services.

Credit Card Processing Services

Your merchant account enables your business to accept and process credit card orders. When processing a customer’s credit card, the transaction will go through a series of complex steps, resulting in the customer’s funds being transferred through your merchant account, and then deposited into your business's checking account within 2 to 3 business days. When you’re ready to select a method for accepting credit cards, you will need to decide between two options: real-time or deferred processing. There are pros and cons to both. With real-time processing, the customer’s card is approved immediately. The order is sent to your business for you to process later with deferred processing.

The greatest advantages to real-time processing are that the customer experiences immediate results and you can conduct transactions automatically, which is particularly important if you don’t have much time at your disposal. Companies tend to prefer real-time processing when they are selling goods or services such as online applications or information that can be delivered over the Internet within minutes. If you want real-time transactions processed, your ISO will have to link your company’s website and your merchant account via a secure payment gateway. If your business does not deliver products instantly over the Internet, then deferred processing, also known as offline sales, may be your best bet. One of the major advantages of deferred processing is the opportunity to examine your orders by hand to ensure that they’re accurate before shipping products to your customers. Deferred processing can also be helpful if your company does a lot of business with distant countries. If the credit card issuer’s network is temporarily down for some reason, it will not impede the successful completion of the transaction. You can simply make a phone call to allow the transaction.

Debit/ATM Card Processing and e-Checks

A customer’s debit or ATM card can be processed almost exactly like a credit card except that the funds get deducted from the customer’s checking account. Online checks, also known as e-Checks, are the online equivalent to standard paper checks. The only difference is that the e-Check does not require the customer’s signature. All you will need to process the transaction is the name of the bank that issued the customer’s checks, the routing number printed on the check, and the customer’s checking account number.

There are two ways your business can accept online checks. You could buy a software application such as Vcheck or Intell-A-Check that enables you to print online checks. Your next step would be to deposit these checks into the bank like a standard check. The downside to this method is that you will have to wait a few days to ensure that the check clears before shipping the customer’s order. The preferred method of accepting e-Checks is to set up a transaction service that verifies the completeness and accuracy of the online check, and for an additional fee, guarantees the check. As an added benefit, the transaction service would reimburse you if the customer’s check turns out to be invalid.