What are Merchant Services?
Merchant Services are what you need to accept and process credit cards from
your web site. There are many steps involved in accepting credit cards because
of the many interested parties. Transactions involve your customer, your
customer's bank, your customer's credit card issuer and your bank.
The following information
describes the step-by-step process of a credit card transaction taking place on
the internet:
Step 1
When
a consumer decides to buy a product or service online, using common browsers
such as Internet Explorer or Netscape Navigator, the secure order form of the
merchant prompts the consumer to enter their name, address, ship-to, credit
card information and any other pertinent information required to process the
sale.
Step 2
Upon
completion of the order form by the consumer, the "Submit" or
"Pay Now" button is clicked to begin the payment process.
Step 3
The
button is linked to the LinkPoint Secure Payment Gateway which
routes and obtains the credit card authorization or declination code. The
credit card is checked against the address verification system (AVS) to
authenticate the cardholder.
An authorization reduces the available credit limit, but does not actually
place a charge on the statement of the cardholder or move money to the
merchant.
In line with bankcard association rules, the merchant is not allowed to settle
transactions until the ordered goods can be shipped, therefore a time lag may
exist between the authorization and the settlement process.
Transaction Descriptions
|
Sale: |
Acceptance
of the credit card for purchase of a product or service. |
|
Return (Credit): |
Is issued
when the consumer wishes to return a product or service after the transaction
has been settled. |
|
Void: |
Is issued
when the consumer cancels the order the same day, and prior to, the settling
of the transactions. |
|
Settlement: |
The final
step to complete the credit card transaction between the consumer and the
merchant. The batch (an accumulation of transactions from the current
day) is settled daily as a group. Settlement means that the credit card
is charged and the money is moved to the merchant account. |
Cardservice International electronically deposits the money into the checking account of the merchant within 48 hours of settlement.
Processing the Credit Card
Once the information is passed to your web site, it must now be verified by
your Merchant Processor. Since most Merchant Processesors don't provide
connections to the Internet, you must pass the information through a gateway
such as Cardservice International. The information
is passed from your web site (on Beck Web Servers & Design servers) to the
gateway (using a secure method provided by the gateway). The gateway services have
a dedicated connection to your Merchant Processor. Once the gateway receives a
response from the Merchant Processor they forward that information back to your
web site where you can act on it accordingly.
Gateway services (such as LinkPoint International, CyberCash or Authorize.net)
are normally resold to you by your Merchant Processor. The fees associated with
the gateway are included in the fees that you pay for credit card processing.
Do I need to have a regular bank account
for my business?
Yes. Where would your Merchant Processor put all the money you make otherwise?