Know everything about credit card processing
Making a sale by card seems very simple, doesn’t it? But, behind the scenes of the physical and virtual retail sales processes, several merchant services exist for the transaction to take place safely.
For those who are setting up a new business or want to improve the company’s financial health, knowing how each internal credit card processing works is extremely important for quality management.
Doubts and difficulties arise daily and administrators are not always able to master how each piece of gear that is their business works.
So, we put this article together so that you understand the difference between:
- 1) Purchaser
- 2) Sub-buyer
- 3) Gateway
- 4) Credit Card Reconciliation System
Purchaser (card operator):
They are at the center of the entire buying and selling relationship with card products because they are responsible for the communication, processing, and traffic of all payment information.
He takes all the information about your purchase, along with your card details, and passes it on to the parties involved in the process: flag and bank that, in turn, approve or disapprove the payment for that purchase.
Sub-buyer:
Sub-acquirers work between the acquirer, customers, and tenants, facilitating relations between these entities and are generally used by smaller companies. Since, for the most part, they do not require any installation and only charge a percentage on the sale (although higher than the purchasers – usually between 5% and 8%).
One of the great benefits of sub-acquirers is that they perform a rigorous prior anti-fraud analysis (before sending payment information to the acquirers).
This prevents the company from being caught up in riskier operations while protecting the end consumer from malicious companies.
They require the customer to open an account and become a user, as he does not need to configure the solution in any environment.
Gateways:
Like Sub-acquirers, Gateways are facilitators. They stay between stores and buyers, simplifying relations between those parties.
A company that sells over the internet, for example, can use a Gateway to check in and process its sales, since it is much easier than integrating directly with the buyers.
These Gateways compile the billing information, encrypt it and send it to the acquirers to do their service. As soon as the acquirers approve the transaction, the Gateway forwards the confirmation to the online store.
The biggest difference with Gateways is that they usually charge a monthly fee based on the number of transactions and not the percentage of sales.
The main advantage of working with them is that they are easy to set up and very transparent.
It can also create some automation such as billing a subscription plan, where a certain amount of the customer is charged monthly.
Credit card reconciliation system:
With the increasing growth in the use of debit and Credit Card Processing as a means of payment, reconciliation systems have emerged. To automate the financial management and cross-checking of all sales information, there is credit card reconciliation systems or merchant services provider.
These systems help the entrepreneur to automatically monitor hundreds and/or thousands of transactions carried out daily in the establishment and ensure that:
- 1) The rates agreed with the acquirers are being discounted correctly.
- 2) The actual cash flow according to the negotiated term and the type of transaction (debit, credit in cash, or installments).
- 3) Monitor risks such as cancellations and chargebacks.
