What are Merchant Services?

Merchant Services are what you need to accept and process credit cards from your web site. There are many steps involved in accepting credit cards because of the many interested parties. Transactions involve your customer, your customer's bank, your customer's credit card issuer and your bank.

 

 

 

 

The following information describes the step-by-step process of a credit card transaction taking place on the internet:

Step 1
When a consumer decides to buy a product or service online, using common browsers such as Internet Explorer or Netscape Navigator, the secure order form of the merchant prompts the consumer to enter their name, address, ship-to, credit card information and any other pertinent information required to process the sale.

Step 2
Upon completion of the order form by the consumer, the "Submit" or "Pay Now" button is clicked to begin the payment process.

Step 3
The button is linked to the LinkPoint Secure Payment Gateway which routes and obtains the credit card authorization or declination code.  The credit card is checked against the address verification system (AVS) to authenticate the cardholder.

An authorization reduces the available credit limit, but does not actually place a charge on the statement of the cardholder or move money to the merchant.

In line with bankcard association rules, the merchant is not allowed to settle transactions until the ordered goods can be shipped, therefore a time lag may exist between the authorization and the settlement process.

Transaction Descriptions

Sale:	Acceptance of the credit card for purchase of a product or service.
Return (Credit):	Is issued when the consumer wishes to return a product or service after the transaction has been settled.
Void:	Is issued when the consumer cancels the order the same day, and prior to, the settling of the transactions.
Settlement:	The final step to complete the credit card transaction between the consumer and the merchant.  The batch (an accumulation of transactions from the current day) is settled daily as a group.  Settlement means that the credit card is charged and the money is moved to the merchant account.

Cardservice International electronically deposits the money into the checking account of the merchant within 48 hours of settlement.

Processing the Credit Card
Once the information is passed to your web site, it must now be verified by your Merchant Processor. Since most Merchant Processesors don't provide connections to the Internet, you must pass the information through a gateway such as Cardservice International. The information is passed from your web site (on HostPro servers) to the gateway (using a secure method provided by the gateway). The gateway services have a dedicated connection to your Merchant Processor. Once the gateway receives a response from the Merchant Processor they forward that information back to your web site where you can act on it accordingly.

Gateway services (such as LinkPoint International, CyberCash or Authorize.net) are normally resold to you by your Merchant Processor. The fees associated with the gateway are included in the fees that you pay for credit card processing.

Do I need to have a regular bank account for my business?
Yes. Where would your Merchant Processor put all the money you make otherwise?

 

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