If you own a business and accept cards as a form of payment, it’s crucial to have a fundamental understanding of the process.
Here are some common terms you should know about:
- Annual Fee: This is sometimes charged by payment processing companies annually in order to keep a merchant account active.
- Application Fee: Most processing companies charge this fee to organizations when they first open a merchant account.
- Authorization: This is the process completed for every card transaction to make sure the account has enough funds available to pay for the transaction. Possible responses include: approval – payment is made, or, decline – transaction is not approved.
- Automated Bill Payment: This is an increasingly popular agreement between a business and a customer that allows the merchant to automatically bill the customer’s card for ongoing products, services or subscriptions.
- Card Verification Code (CVC): This code is used to help with fraud prevention, and is typically a three or four digit number found on either the front of back of a credit card.
- Chargeback: When a transaction is billed back to a business after payment has already been processed. A chargeback is in favor of the customer and sometimes occurs when a card holder is not satisfied with the service or product they received.
- Merchant Account: This is an account that business owners need to set up in order to process card payments. There are a wide range of account options available today.
- Online Payment Gateway: An application that today’s businesses can use that allows for easy, secure credit card processing.
- Third-Party Processor: A company that will process cards for a merchant.
BillingTree’s Payrazr solutions offer software applications hosted online that can be accessed from any internet connected web-browser. Contact us for details about how you can enhance your credit card collections processing abilities today.