Understand Payment Processing

Are you an SME owner and want to sell your products or services? You may be shuddering at the thought of having to maneuver through this maze that you see as consumer payment processing. Below you will find some information that may help you better understand this at first glance complex world.

Merchant account

A merchant account is an account that is opened through a credit processing company or bank for the purpose of accepting and processing authorizations to debit credit cards. Without a merchant account, no one can accept payments through any major credit card.

How to get a merchant account

It can be obtained through a formal request made to an interested financial institution or to the Merchant Service of a bank. You have to see a merchant account as a form of credit. That is, your financial institution will assess your credit to see if your business presents an acceptable risk. This means that merchant account UK providers will generally require you to see your financial statements. If your business is starting up, you will no doubt also need to produce a comprehensive business plan.


A merchant account can have a variety of fees; some are periodic, others are billed on the basis of items purchased or as a percentage. The majority of the purchase or percentage based fees are transferred by the merchant account provider to the credit card issuing bank according to a list of rates called “interchange fees” which are determined by Visa and Mastercard. Interchange fees vary depending on the type of card and the circumstances of the transaction. For example, if a transaction is made by swiping the card into a terminal, it will be a different transaction category from a transaction processed manually or processed / performed by telephone.

What is a chargeback?

Essentially, a chargeback occurs when a cardholder questions the sale to the bank that issued their card. Not to be confused with a refund which is a simple operation whereby a merchant refunds a transaction. In the case of a chargeback, the issuing bank makes a request to collect the money on behalf of the cardholder. The merchant agrees to pay a chargeback fee (usually between $ 25 and $ 50) for each chargeback that the bank deems valid. The most common complaint heard about chargebacks is that the cardholder does not remember the transaction. That said, the percentage of chargebacks is very low for transactions made at the point of sale. See Managing Chargebacks.

For this, it is imperative that customers can easily access various means of payment allowing them to pay for their purchases. As an e-commerce manager, you are then responsible for choosing between different online payment solutions, so that they are adapted to the needs and consumption habits of consumers. This is a real obligation so that your e-commerce can quickly prosper. The strategy your business wants to adopt. This means that you need to know from the start if you are only going to sell your products domestically, or if you also want to sell globally. The means of payment will not then be the same systematically, adapting to the habits of consumers in each market. It is important to be able to differentiate yourself from the competition by offering other payment methods to your customers. We have therefore decided to offer you a selection of E-commerce Nation online payment solutions. No order is established in this list.

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Murtaza Ali

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