Credit Card Merchants

Credit card merchants are the cards provisioned for the merchant account, which can be used for payment processing to settle the credit transactions. Business merchants that enable its users to make purchases/shopping using credit card actually use the merchant account, which is an agreement between them and the acquiring bank on the settlement of credit transactions.

The transactions are done either

•at credit card terminal where the electronic verification is done or
•at payment gateway when online or
•Automated response unit where transaction can be done on phone.

A physical machine is provided in which the credit card is swiped , where the magnetic strip on the card is read and authentication done. End user/buyer needs to sign the receipt generated by this machine, which is an assurance of the payment from the acquirer bank to the merchant.

Payment gateway allows an individual to provide credit card authentication with CVV/Pin number along with other credentials like card holder’s name on credit card, expiry date.

Transactions done over phone requires manual entry of credit card details on phone ,key punched are used as means of authentication.

Once the authentication completes, it is stored in a batch, sent by merchant to the acquirer bank to receive payment.

The acquirer bank receives the batch statements, and based on the authentication it has done, deducts the amount from the issuer bank and pays the acquirer

Credit card companies like –visa/MasterCard and banks like ICICI/HDFC etc together decide on the fees to be charged on the credit card merchant.

Out of sight is out of mind, buyers tend to purchase more where they can ,without cash, so merchant credit card helps attract

• more customers
• more spending capacity
• speedy payment
• and also build a better image for the seller