Merchant Account Processing

Written by Samuel Wong
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When setting up your merchant account, you will most likely have many questions about the ins and outs of merchant account processing. The most commonly asked questions revolve around the time it takes a payment to post to your bank account. The second most commonly asked question is what you get for the fees that you are paying to the credit card processor.

Merchant account processing is a simple procedure carried out billions of times each day. When you make a sale either on or offline, you swipe or key in a credit card number and submit it to the credit card company. Within 2-3 seconds, you have a response. The approval number for your transaction is the promise of the card issuer to pay for the charge. Once the bank pays your processor for the charge, your credit card processor deposits the funds into your account. This deposit to your account is usually performed in three days.

About Merchant Account Processing

You are probably wondering why you pay the fees and charges to your credit card processor. These fees go to the actual submission of your charges to the lender, and in return, dispersing the funds to your account. The amount of infrastructure required to provide for immediate response to a request for a charge is so large, that most of the fees collected are used to cover the cost of maintaining this infrastructure. Depending on your merchant account service provider, you may also receive items for free or at a reduced rate, such as credit card terminals or printer tape.

Merchant account processing is a very simple process; however, it does require a large, expensive, and established platform to produce the reliability and response on which we have come to rely. Keeping up that platform requires money. This is why most charge fees, and this is why we keep paying those fees. The convenience is worth it!


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