About Merchant Services and Its Process of Payments


Merchant services are also sometimes known as credit card processing. Electronic payments are managed through the method. In this method, the payments are run through an account, which a merchant puts up with the help of which the credit card processing is facilitated. One of the best things that you will know about this service is that it simplifies the payment acceptance methods, and allows the merchants to broaden their payment options and get the cash quickly in their accounts. There are many ways in which credit card processing works. One of the things that you will note is accepting or working out on a credit/debit card is complicated work. 

Complex Services – 

One of the reasons why merchant services are a complicated one is because it is done electronically. The process of the payment receiving system by the merchants is as follows – The consumer will provide the card for making payments online at the shop or the store. After that, when the card is either swiped or entered into the electronic device, the consumer then fills up all the information online. Apart from that, after the consumer has entered the information, the information is directly transferred to the acquiring bank i.e. the merchant’s bank. 

Process of Payment – 

Then, to a payment processor, the acquiring bank sends the information after which it is the card i.e. MasterCard or Visa. After this process, the card association will transfer the transaction to the issuing banks after which they will send a request for approval. If this entire transaction whether done through mobile processing or use of the electronic device, if is approved then the banks that issue sends a response in the form of an approval code back to the merchants or card association. So, likewise, there are many codes that are exchanged before the electronic device prints a receipt or some mobile bill/receipt is transferred to the consumer. 

Reasons of Liability – 

Every time a consumer swipes his or her card in the electronic payment devices, there is a certain fee that the banks charge and that fee is deducted from the account of the merchants. One of the reasons why the fee is charged is because the issuing banks and acquiring banks take the fiscal liability of the card transaction that is done electronically. Another reason for the same is that if the consumer defaults in making the payment then, the issuing banks will be the ones that will be liable, or the banks will be the one victim of the fraud. However, thankfully, there is the technology of EMV chip that is working. 

Factors on Which the Fee Charged from Merchant Depends – 

Now, the type of fee and the amount that has been charged as a merchant depends -on various many factors. Some such factors are – the type of business and the business is in most of the cases is defined by the merchant category code. Then, another factor that is included is how risky is the business. Apart from that, merchants’ credit history and rating are other factors that are taken into consideration. So, likewise, there are many such factors that are taken into consideration when the fee amount is charged by the merchant.