The money that you receive from credit card transactions will first be placed in your merchant account. It will remain in this account for approximately 48 hours, after which the funds will be transferred to your personal or business account. Many merchants who are new to credit card processing often wonder why transactions must be processed in this way. Credit card transactions must be handled in this manner in order to provide security.
The Role of Merchant Accounts
Credit card companies such as Visa and MasterCard must be able to take back transactions which are fraudulent or under dispute. They have to do this before the funds arrive in your bank account. Merchant accounts act as temporary repositories that will hold your funds while the transaction is verified. Once the verification has been completed, the funds will then be made available to you. Most merchant accounts will be offered by merchant service providers. Another tool that is needed to receive payments from credit cards is a POS system.
Point of sale systems must be physically installed in stores so that credit card payments can be accepted. The most basic systems consist of the cash register, credit card terminal and the printer which will print out the customer’s receipt. More advanced POS systems will give you additional capabilities, such as inventory tracking or transaction reporting. When the customer uses their credit card at the POS, the funds will be transferred from the terminal into the merchant account.
Receiving Funds from Online Transactions
Online credit card transactions are slightly different from their real world counterparts. For instance, a merchant that operates an e-commerce site will need to setup a shopping cart. The shopping cart is the area of the store where customers can pick the products they wish to purchase. Another tool which makes online credit card payments distinct is the payment gateway.
The payment gateway provides increased security for your transactions, ensuring that you will receive the funds. It functions as a form that customers can fill out, entering their credit card data and other details in order to complete a payment. Payment gateways utilize back end technology that will process the transaction. Once the payment gateway has done its job, the funds will be transferred to your merchant account, and then your actual bank account.
Receiving Your Funds from Mobile Payments
A number of businesses are now accepting payments via smart phones or computers. Hardware can be attached to the phone or computer which transforms it into a portable card reader. This allows for transactions to be carried out wirelessly. Receiving your funds from this mode of payment is very similar to both online and traditional brick and mortar credit card transactions. The smart phone or computer will have software which will interface with the hardware, processing your payments and transferring it into your merchant account, where it will remain until the funds are authorized to be moved to your bank account. Regardless of the method you use to accept credit card payments, the funds will be delivered to your account safely and securely.