Types of Credit Card Payment Systems

Three types of payment systems by credit card are widely available for merchants, including:

  • Alone terminals
  • Cell phone processing solutions
  • Virtual terminals

These payment systems allow merchants to process a variety of transactions, such as payments by credit card and gift card. Customers are more likely to buy from a dealer if they offer a variety of payment options at checkout.

Types of Credit Card Payment Systems

Alone terminals

Alone terminals are the type seen in retail stores. The client, or dealer, slips the card through a magnetic stripe reader. The information is then sent to the high risk merchant and is accepted or rejected. Accepted transactions are credited to the merchant’s account at the time of sale.

The standalone payment terminal system transmits information in a variety of ways. The transmission takes place via a telephone line or via a high-speed cable system, using Ethernet cabling. The terminals are typically plug-and-play, which means that once they are connected to a computerized system, are immediately recognized as part of the system.

The standalone terminal is designed to process:

  • Credit cards
  • Gift cards
  • Loyalty cards
  • Check verification
  • Control the conversion
  • Age verification

Cell Processing Solutions

Companies that need to operate on the road, such delivery drivers or antique dealers, able to accept credit cards using mobile technology. Payment systems of the cell using the Wireless Application Protocol technology (WAP). WAP phones send information of a credit card processor. Cellular systems depend on the availability of a satellite link. Traders operating in populated areas to find the ideal system. Traders operating in rural or mountainous areas may have trouble with the processing of the cell, due to signal interference.

Virtual terminals

Virtual terminals are designed to process credit and debit card payments online. Virtual terminals are very useful for payments, such as monthly or recurring membership dues rate. The payment system of the virtual terminal is a mobile system, it can be used anywhere there is an Internet connection. Merchants benefiting from a virtual terminal are the merchants that operate online auction sites, sales through the website or that they charge recurring fees.

Payment Processing Gateway

Once merchants have a terminal to accept payments by credit card you need a way to process payments quickly and easily. A high risk gateway provider does just that: it is able to manage recurring payments, ACH payments, and process online reports.

The traders who treat hundreds or thousands of payments each month can benefit from its payment processing gateway. The gateway can streamline payment processing, allowing the merchant to integrate their payment systems with their verification systems and transaction management. This, in turn, eliminates the middleman and allows merchants to get the online instant report.

Automated Clearing House (ACH)

ACH, or Automated Clearing House, is a process that clears credit and debit transactions by payment systems through the participation of financial institutions. ACH is faster and less expensive than paper checks or credit card transaction processing. Five steps are involved in an ACH transaction:

  1. An authorized sender receives permission from a receiver to start a transaction.
  2. The sender creates an ACH entry for a processor.
  3. The processor sends the information to the financial institution participant.
  4. The ACH entry is then sent to an ACH operator, which is usually the Federal Reserve.
  5. The ACH entry is sent the receiving institution, where a debit or credit to an account occurs.

Merchants can expand their business by providing a payment system to customers with a credit card, in the checkout line. Customers indulge in impulse buying if they can use a variety of payment methods. Terminals for credit cards are an effective, since a series of payments, including gift cards and checks, are accepted. Payment systems by credit card increase business sales and their bottom line. Read more: How to Avoid Common Startup Mistakes that Can Kill Your Business.

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