Most retail businesses these days accept credit cards for payment . Today's technology is much faster then the old days when credit card payments were slow, even requiring phone calls to processors for items over $50 . Today credit card processing is fast, efficient, and is instantly approved or declined. Its about as fast as paying with cash, and in some cases no signature is even required. Debit cards work the same as a credit card where the customer swipes their card and payment is processed. The difference is that a debit card is more like a checking account where the funds need to be there to approve the sale. Both credit cards, and debit cards are processed in the same manner.
In 2007 more then 23 billion credit cards were processed in the United States. This number is expected to grow by 25 percent in the next five years. The use of cash is declining because of technology and security of debit and credit card transactions. Using a credit or debit card has increased a lot because almost every retailer and restaurant accepts them. Even some wholesalers are accepting them as payment for raw goods, or product needed to run a business.
Because of the increased amount of credit card use, merchant banks have also increased. A merchant bank is an institution that handles all credit card, and debit card sales. They act as sort of a middle man to regular banks handling and funding all the merchant accounts.
Most credit cards transactions are made by means of a terminal or credit card machine. The transaction is sent via telephone line to the issuing bank for approval. Once the approval is made, the transaction is stored and is batched out to the merchant bank at the end of the work day. Its up to the merchant bank to finalize the transaction, and fund the business his money. The merchant bank receives a percentages of sales for this service. The percentages can vary depending on the merchant agreement, and the amount of sales. Merchant Banks are very competitive. and its important to shop around for the best rates for your individual company. Some Merchant Banks may charge hidden fees, and other charges, but offer a lower interest rate. Its essential that the business looks at all charges when selecting a Merchant Bank