Electronic Credit Card Processing

Merchant Warehouse |

December 7, 2010

The success or failure of any business depends strongly on its ability to receive and process credit card payments. These types of transactions allow merchants to attract the attention and capture the business of impulsive buyers and smart shoppers alike. Modern processing systems also ensure that they will receive a timely payment.

Electronic credit card processing for ecommerce means orders are done directly on the Internet. Normally this is a complex arrangement that needs the coordination of several factors such as a website, the customer’s credit card company, a gateway and an account into which deposits are credited. Electronic card processing is a safe and effective way to receive payments. It is also a great way to provide a fast, quality shopping experience for the consumer.

Online and Off

A merchant’s point of sale (POS) may be a physical terminal or software on a PC. Processing can be done in a number of “electronic ways” – over the telephone, with a fax machine or through a computerized “virtual terminal” (which may result in lower costs compared to a physical terminal). Computers are the future, and the future is now, so many businesses are making the move to PC-based electronic credit card processing.

A virtual terminal allows the merchant to process transactions online. Through the network link an authorization is given on the credit card and a hold is put on funds to secure the transaction. The processor sends a request to the cardholder’s bank to settle the amount of the transaction to the merchant’s account. All the companies servicing electronic credit card processing use some form of secure encryption method to guard customer account information.

Credit cards are processed ether in real time or in a collective manner called batch processing. Electronic credit card processing usually has excellent real-time processing speed. The purchase is processed instantly and the customer knows whether or not his/her card is accepted or declined. Batch processing is ideal for some smaller businesses. In this process, many credit card transactions are processed simultaneously at a later time, significantly lowering the risk of fraudulent charges.

On the down side, real-time processing has a higher risk of fraud, since someone can use a stolen card before it is reported to the card-issuing bank. Another disadvantage to electronic processing in general is that you can’t accept any orders when the credit card processor’s server is down or your own essential equipment is inoperable. When power went out in the “old days,” you could still swipe that card on an imprinter with the carbon-copy forms. You didn’t have to plug anything in to do a credit card sale. Of course, you never knew if the charge was going to go through, either. Perhaps we can live with a power outage or faulty server from time to time.

These days many reputable companies offer faster, more reliable and safer electronic credit card processing services. Electronic credit card processing is the wave of the future and should be seriously considered for the future of any business. This is an era of “ultra-competitiveness,” and there is no better way to be at the top of your game than to have the latest in credit card processing technology.