Whenever you accept credit cards in a retail setting, there are some technical and accounting issues you should be aware of. This is important in order to help you understand what could go wrong and why.
More importantly, by understanding the merchant account payment process, you’ll know when to expect to have the money deposited into your account.
The process begins when you or your staff enters the customer’s credit card information into a computer using a credit card terminal.
Alternately, you can use credit card processing software to accept credit cards. The difference is that instead of swiping the card, you enter the credit card information manually.
At this point, you’ve probably realized one of the decisions you have to make before you can accept credit cards. You must choose whether to process credit cards using a PC or a credit card terminal.
While a PC can offer many advantages, a credit card terminal is usually much faster and more reliable. For this reason alone, most merchants use a credit card terminal to process credit card payments in a retail setting.
When accepting any credit card payment, it’s important to choose the method that best fits your overall business plans and needs. We’ve provided another article to help you make this decision. (“Credit Card Terminals vs. Software”)
Once you’ve entered the credit card information, your computer or credit card terminal dials a toll-free number and connects to Ensight Merchant Services. Your terminal or PC will send the credit card information and the amount of the purchase to our processor.
If you’re using PC software to process credit card transactions, you may be able to use your internet connection to reach Ensight Merchant Services.
Ensight Merchant Services processor will then send your customer’s information to the bank that issued the credit card.
The bank will confirm the validity of the credit card, and make sure there is enough available credit to cover the requested purchase.
If everything is in order, the bank will set aside the requested funds, and send an approval number back to the Ensight Merchant Services Processor. If there are any problems, the bank will send a “decline” message.
Our processor will send all of this information, including the approval number, to your credit card terminal or PC. At this point you’ll be able to print a receipt for your own records.
The whole process usually takes about three to fifteen seconds, so you can process many credit card transactions in a short time period if you or your staff can enter credit card numbers quickly.
The only way technology might slow down a credit card payment is if your printer fails to rapidly print out a receipt. In a busy retail environment, this can keep customers waiting in line, and discourage them from returning to your business in the future.
For a comparison of some of the quickest printers on the market, see our Printers and Printer/Terminal Combinations section.
Of course, the biggest question we get about processing credit card payments is “How soon will I get my money?” Here’s how it works.
At the close of your business day, you can choose to manually “settle” your terminal, and this begins the final step for processing the day’s credit card transactions.
Or if you prefer, Ensight Merchant Services can usually settle your transactions at a specific, predetermined time. The advantage of this second option is that your credit card transactions will be settled automatically at the same time each day.
As soon as you initiate the settlement process, the bank that issued your customer’s credit card will transfer your funds, and Ensight Merchant Services will electronically deposit them into your checking account.
From the time of the original credit card phone transaction, it will usually take two business days for the funds to reach your checking account. At this point, the availability of the funds depends upon the policies of your bank.
This last step is important. Once you know how soon your funds are available, you can make use of those funds and plan your own payments, transfers, or other accounting procedures.
Ensight Merchant Services is committed to making things run smoothly whenever you process credit cards. If you have any questions, feel free to call us toll-free at 866-377-2292.