Accepting credit cards is a crucial part of profitability for businesses today. Essentially, businesses lose money when they cannot accept credit cards as a form of payment. With the widespread use of debit cards, people are using cash for their daily dealings less and less. In today’s world, most individuals only carry a few dollars on them for emergencies. Personal checks has become a thing of the past. For consumers, they are difficult to carry and time consuming to write at the time of check out. Fewer companies are accepting checks now. Comparing to the cost of processing credit cards, the cost of retrieving inadequate funds is staggering. The merchant service provider is able to make sure the availability of funds immediately, while a personal check takes days. The boom of online shopping, also known as e-commerce, has made having a credit card or debit cards and being able to accept debit or credit card is a necessity.
How do businesses get paid when a customer uses a credit or debit card to pay for services? The credit card is “swiped” and a merchant services company gathers the customer’s account information and confirms the amount is available. The merchant services then collects the money from the customer’s account and deposits the amount into the organization’s banking account. The merchant service charges the company a small fee for each deal. The fee may be less than 1% or as high as 3%. The amount paid to the company depends on your credit cards processing company and the size of the business. On the processing side, there is profit with a large volume of dealings or a hefty processing fee imposed on the company. On the business side, it is best for businesses to decrease costs. Business will look for a merchant cards services company that has the lowest rate per deal and deposit funds as quickly as possible.