Credit Card Merchants

Written by Kevin Tavolaro
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If you want your business to start accepting credit cards, you will have to find a credit card merchant to process all of your credit card transactions. Even after you select a credit card merchant, you must still be approved in order to be able to process credit cards. Credit card merchants will review your credit and business history, as well as the likelihood of fraud and chargebacks in your particular industry, before authorizing your account.

Types of Credit Card Merchants

Third-party processors are the most commonly patronized type of provider. These are organizations that have been authorized by the major credit card companies to regulate credit transactions between the customer, the merchant, and the card provider. They are equipped to handle card authorization, billing, settlement, and reporting. Third-party processors often act as the intermediary between a merchant and a card provider, as the third-party process can access credit records unavailable to the merchant.

Financial service providers are credit card merchants who also provide merchant solutions. Most credit cards require you to establish a merchant account through an intermediary bank. When dealing with these companies, you also need a third-party organization to regulate card processing and authorization. Financial service providers allow you to bypass third-parties, and apply for an account and processing services directly from the card merchant. American Express and Discover are among these types of credit card merchants.

If you run a small, seasonal, or specialty business, you might want to consider using a trade association to handle your credit card needs. Trade associations offer credit card processing services to some organizations, often at a discounted price. They are especially popular among businesses that traditionally have difficulty being approved for a merchant account.

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