Third Party Credit Card: Processors and Processing

Processors and Processing

Are you at a point where your business is stuck without it being able to process credit cards? And to make it worse, the merchant account provider refuses providing you with a merchant account? Whatever the reasons may be – high-risk business type, no credit history, new business, and so on, there is a way out. The light in the dark is called third party credit card processing.

Third party credit card processing enables you to accept credit card payments through a third party merchant or a third party merchant affiliate program. There are a lot of third party credit card processors available on the market today and understanding how third party credit card processing works may help you pick the right third party credit card processor.

The third party credit card processing process is much less complex than a merchant account credit card processing scheme:

• A third party merchant account is setup and integrated into your business,
• The client, interested in your product or service, fill in the relevant transaction and personal details at the checkout,
• These details are sent through a secure gateway to the third party merchant processor.
• These details, automatically processed, are then passed through a final gateway between the third party merchant processor, acting as a normal merchant, and the bank.
• Transaction and commission fees are charged, and are subtracted from your final payout, which is made once or twice a month, depending on the third party credit card processor.

Bear in mind that being a third party merchant has disadvantages as well as advantages. Let’s start with the disadvantages. Being a third party merchant processor the transaction and commission fees may be more than half as higher as a normal merchant account transaction and commission fees. The reason for that is: a third party credit card processor is actually still the same merchant, and pays for the setup, membership, transaction, and other fees, to which merchant credit card processing accounts are subjected. Some merchants think that clients tend to mistrust third party credit card processing, and that is absolutely not right. Even if there was a tendency for clients doubting third party merchants, this tendency is out of your way now.

As for the advantages: businesses deprived of the benefit of having merchant accounts can still process credit cards, third party credit card processing is easily setup – no gateway fees, and more importantly, no monthly fees (which makes the disadvantage of higher processing fees convert into an advantage!); much more types credit and debit cards supported and handled; online instant and detailed statistical information (like full transactions details). There are more advantages of which we haven’t said like affiliate third party merchant programs. As you see there are far more advantages than disadvantages, proving that sometimes it’s best to start a fresh business with a third party merchant credit card processor.

Third party merchant accounts are recommended to young and new businesses which just need a little bit of ‘water’ to start blooming. When a business is steady and brings high profits it is recommended to get a merchant account. In case of high-risk businesses an offshore merchant account would be the solution.

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