New to Credit Card Payments? What to Know

As a customer, it helps to memorize your PIN, card limit, interest rate, and cancelation phone number number. It could also be handy to understand how to read credit card statements. Beyond that, just swipe and sign.

But from a business perspective, there’s a little more involved.

For one thing, you need to know what level your business is at. This affects your PCI compliance requirements:

• Less than 20,000 annual card transactions = Level 1
• 20,000 to 1 million cards transactions a year = Level 2
• 1 million to 6 million annual card transactions = Level 3
• Over 6 million card transactions a year = Level 4

Each merchant level has its own set of PCI security requirements. PCI stands for Payment Card Industry, and its council lays out 12 regulations to ensure card security. It’s not a state-wide legal mandate, but Visa requires compliance before it will allow its cardholders to buy from you. Also, some states demand PCI compliance for any business that accepts credit card payments, so it’s worth looking into.

Ensuring PCI compliance

Your merchant processors or payment processors can assist your business with becoming PCI compliant. These companies link your customers’ credit card accounts to your bank, depositing payments in your account when your customer makes a credit card purchase from you. Whichever payment processor you opt for, make sure they’re recognized within their industry.

Some of the areas covered by compliance include encryption. This means when a customer types their details on your online store, or their PIN in your keypad, their details are encoded. They’ll be encrypted from end-to-end at every stage of the transaction. So even if it were possible for the data to be intercepted, it still couldn’t be used or understood. It appears only as gibberish to any would-be data thief.

Fees and billing

Once you identify a merchant processor you’re happy with, you need to open a merchant account with them. Picking the right merchant processor solves a lot of your problems, but it’s important to use the right criteria. Some payment processors have a non-refundable application fee. Others offer free application and can set up your merchant account immediately. Check their terms and conditions pages to see if they have any caveats.

For example, if you run a gambling site, you may be labelled as ‘high risk’ and be blocked from opening an account if you choose the wrong processor. You should also confirm your processor’s stand on prior bankruptcies and bad credit, if either of those things applies to you. Some merchant processors will support you despite your past financial faux pas.

For more details on what you need to know about how credit card payments work, or to sign up for a merchant account, please call (888) 924-2743 or go to Charge.com.