Accepting Credit Cards

Accepting credit cards in today’s world is almost a requirement of any business, whether you are selling goods or providing services. Credit cards are no longer reserved just for large dollar purchases, but they are used for everyday items such as gas and groceries. Convenient to carry without worrying about how much cash is in your wallet, most consumers prefer to pay for items via a credit card. If a merchant is not accepting credit cards, there is a good chance he will lose a large percentage of impulse buyers as well as general business sales. And for internet and mail order merchants, accepting credit cards is virtually mandatory, as it opens up your business to national and global sales.

How It Works

Credit cards can be accepted and processed via computer software, the internet, a point of sale terminal, the telephone, or a wireless device. Computer software is available for both Windows and Macintosh systems and can be installed on either a desktop or laptop. Not only does this method allow you to store electronic copies of all your transactions, but you can also easily print reports.

Entry can be either manual or a card can be swiped through a USB swiper. Through the internet, you can manually enter the information yourself into a virtual terminal. A point of sale terminal is common at retail stores where a credit card is physically swiped, although the information can also be entered manually. Most terminals have a printer built right into them and transactions are batch processed over a standard phone line or internet connection.

The telephone can also be used for credit card processing by dialing a phone number, typically toll-free, and processing the transaction using your telephone keypad. This is beneficial for merchants with a limited number of transactions because it requires no equipment or software. Wireless terminals can be used anywhere because they contain rechargeable batteries and use wireless networks instead of phone lines.

In order to accept credit cards, you need to establish a bank account, called a merchant account, which gives your business the ability to accept credit cards, debit cards and quite often electronic checks typically by extending a line of credit to you. The credit cards that are accepted by merchants will vary, but the major ones are American Express, Discover, Visa, and MasterCard.

While the merchant account is the financial institution that approves your business for accepting credit cards, payment gateways are another critical component for the actual credit card processing and approval or denial of the credit card transaction. Payment gateways are responsible for securing and verifying the information, and acting as an intermediary between the merchant and the merchant account. Although payment gateways are typically separate from a merchant account, most merchant accounts will provide a payment gateway for you as part of their service.


The fees for a merchant account can vary, but typically there is a cost for setting up the merchant account and setting up the payment gateway. Recurring fees for these services will include a discount rate, which is a percentage of the total transaction, a transaction fee, and an authorization fee. Additionally, there can be annual fees, batch fees, chargeback fees, customer service or maintenance fees, early termination fees, monthly minimum fees, and statement fees.

Shopping Cart Feature

Another feature offered by some merchant accounts is a shopping cart, which is necessary for a web store. It is important to make sure your shopping cart and payment gateway are compatible, which is one reason many people choose a merchant account that offers all of these services together. One of the benefits of an online store is that it is open twenty-four hours a day, seven days a week, and 365 days a year, excluding downtime for routine or occasional maintenance.

Even if you are not shipping goods or providing service non-stop, your customer can make that purchase any time or day, nationally or globally, simply by shopping online on your web site. Whether you are providing merchandise or services online, your customer will need a way to select items for purchase and then pay for them. The internet shopping cart, which is also known as a virtual shopping cart, is a program that basically allows people to choose items from your store and then purchase them.

Behind the scenes, the shopping cart program needs to be able to store product descriptions and calculate inventory as well as manage orders and customer information. This will then allow a customer to simply place items in their cart or basket and then go through a checkout process. At that time the customer is given a list of their items along with a total cost. The sales total will ultimately take into consideration any discounts, coupons, sales tax, or shipping costs. As part of the sales process, the customer will enter his shipping address, billing address, and payment information. Real time internet payment services are available to provide real-time authorization for credit cards and electronic checks.

Electronic Checks

An electronic check, processed as Electronic Check Conversion, is a way of paying for goods or services via EFT (Electronic Funds Transfer). The same laws that regulate paper checks rule electronic checks, and they are made safe through various methods including authentication, digital signature, encryption, and public key cryptology.

If a customer chooses to pay by electronic check instead of credit card, he will provide his checking account information, such as the check number, account number, and bank number, to the merchant who will then process the payment, most likely utilizing the same merchant account established for credit card processing. The law requires that a person must be notified if a check may be used to make an electronic payment, but there is no law that states a merchant must give a customer an opt-out option. Therefore, if a person chooses not to accept electronic check conversion, he will most likely have to select a different payment option such as cash or credit card.

If a store converts a customer’s paper check into an electronic payment, the voided check will be returned and the person will receive a receipt. If the buyer makes an electronic check payment by telephone, obviously the check will still be in his hand. Therefore the bank will be unable to return cleared checks to the account holder with his statement, so he must keep good records and verify that his bank statement is correct every month.

A consumer does have legal rights to an investigation if there is an error or dispute. If there is not enough money in the checking account to clear the payment, a fee for nonsufficient funds will be charged by the merchant, similar to fees for bounced checks. This is important to note because one of the main reasons a merchant chooses to accept electronic checks for payment is that it clears faster than a paper check. For that reason, a consumer should be certain the funds are available prior to submitting the check for electronic payment.

Compare Your Options Now!

Since merchant accounts have become easier to establish and credit cards are now widely accepted on a global basis, it is common to pay for goods and services with a credit card. Whether it is for clothing or a utility bill, a credit card can certainly be used to pay for it. There are many credit cards to choose from, and you can start shopping for yours today by using our free credit card chaser! It’s simple to use and you can do it right now!

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Disclaimer: This content is not provided or commissioned by American Express, Visa, MasterCard, Discover, or any other credit card company or issuer. The opinions expressed here are the author's alone, not those of any credit card company or issuer, and have not been reviewed, approved or otherwise endorsed by any credit card company or issuer. Credit Card Chaser may be compensated through various affiliate programs with advertisers. As always, Credit Card Chaser is an independent website commmitted to helping people research credit card offers and find the best credit card!