Credit Card Processing in California
Finding credit card processing in California may prove to be a daunting task for business owners. Discovering how to search for an honest and affordable credit card processor will be helpful to merchants statewide.
Business owners typically allow their banks to handle their credit card processing, but have found that it was costly. They are interested in seeing whether they can lower their transaction fees by finding local credit card processing in California instead of using their bank as their merchant services provider. Learn how the process of accepting credit cards works below:
Who is Involved?
There are always four parties involved in every credit card processing transaction:
1. Merchant – The business owner who receives a payment from their customer.
2. Acquiring Bank – The bank that the merchant uses to provide processing services
3. Issuing Bank – The bank that issued the credit card to the cardholder.
4. Cardholder – The customer of the merchant.
How Does it Work?
When a transaction occurs between the cardholder and merchant, fees are deducted by the issuing bank and acquiring bank, so the amount deposited in the merchant’s account is less than the amount charged to the cardholder.
The issuing bank’s fee is called the interchange fee, and the acquiring bank’s fee is called the discount rate. Both of these are expressed as percentages of the transaction.
The exact interchange fee charged to the acquiring bank and merchant is determined by several factors: whether the card is present at the transaction, what type of card, and what type of merchant accepts the card. The safest transactions occur when the cardholder is physically present to swipe the card and sign the receipt. The riskiest transactions are those that are done over the phone and Internet. That’s why it is important when looking for credit card processing in California to reveal the type of business you are.
Before you start looking for credit card processing in California, it is important to understand the basics of accepting credit cards. This background information will be helpful if you have struggled to understand credit card processing. You may be looking for credit card processing in California because you found out you were paying more than necessary for processing your transactions, and the above information will be helpful to reference along your search for a reliable merchant services provider.