Charge It! Options to Credit Card TerminalsCredit card laundering, sometimes referred to as "factoring," works like this: A company that does not have a credit card merchant account with a bank or credit card company recruits another company (that does have a merchant account) to process credit card transactions through its account. When the processing merchant receives payment for the credit card charges, it turns the money over to the company that doesn't have an account, but it keeps a previously agreed-upon percentage or other fee. The reasons why some companies need other companies to process their credit card transactions are most often not the "hard luck" stories that the company representatives might tell you. In many cases, these companies need other merchants to process their credit card transactions because investigations and credit checks by banks and/or credit card companies revealed that these companies are bad risks and may end up having excessive charge-backs. Bank Investigations and Regulations Banks and some credit card companies investigate and evaluate businesses before they give them merchant accounts. One reason they do this is to avoid doing business with merchants they consider to be at potentially high risk for incurring losses, excessive charge-backs, or harm to the reputations of the credit card companies and their members. Once an account is opened, regulations provide that a member bank may not accept deposits from any person or entity with which there is no merchant agreement. Therefore, merchants can legally deposit only those drafts generated by their own businesses. If someone approaches you, wanting to process credit card transactions through your merchant account, keep the following in mind: Reasons for being denied a merchant account are not as simple as being a certain "type" of business that prevents the company from being approved for a merchant account. Instead, it may be because a bank or credit card company concluded, based on its investigation and credit check, that a particular business is a bad risk. Yes, banks may want information and financial records. Obtaining this information is not an invasion of privacy; rather, it enables them to evaluate the company in order to protect itself, consumers, and you from risky companies. Likewise, if a bank ever asks for a large opening balance before granting a merchant account, it is because the bank determined, based on its investigation, that the company poses a financial risk.
Merchant solutions Carver
There are some good reasons for using a merchant credit card terminal. But before you dive in and grab one, make sure you really need one. And if you decide you really do, then shop around for the right one to best suit your needs. There are plenty of them available on the market today, but they aren’t all the same. It’s worth your time to gain a little knowledge about the differences.
With most terminals, the best situations are when you’re doing business with your customer in person. They swipe their card, sign their receipt, and the transaction is finished. But in these situations you have someone who is using a credit card that is ‘right there’ in their hands and physically at the point of transaction. They can either ‘swipe’ the card, or punch in the numbers on the keypad.
Terminals work fine by phone also, just by punching in the numbers and completing the transaction that way. If you are going to open a merchant account, then the odds are you’re going to need a terminal to operate your business. Some people have more than one account. In this case, you want to find a terminal that can handle this situation, and they do exist. Many of them are designed to handle up to nine separate merchant accounts.
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