Online Transactions With Credit Cards

By Greg Pierce

If you are planning to apply for a credit card and start doing online transactions, you may
want to consider these tips.

First off, you have to have a bank or a financial institution. You should choose a bank that is
capable of doing online banking or is using the Internet for doing transactions. It is
advisable, of course, to use the current bank where you are already doing business with.
This is because banks that offer merchant accounts will usually check you out thoroughly.

You can avoid this if you have been doing business with a certain bank. There are times,
though, when no bank or financial institution would allow you to set up an account. When
this happens, your solution is to go to a broker. There are many brokers online so you would
easily find one. However, you have to be watchful since not all are legitimate. Thus, you
have to also conduct a background search before paying a broker. Those these brokers
may seem like your business partner, they are not like your regular business partner. You
will only value them during your application. These brokers usually earn from card-swipe
marchines percentage, application fee, or other upfront charges. What they'll do is find a
bank and apply for you. The bank that they will choose will be one allows the use of
someone's credit card history.

After setting up your account, youll discover that the people who process credit card
transactions are just contracted by the bank. Transaction clearinghouses are tasked to
inform you whether you have a valid credit card or if the limit of your credit card is reached.
Your payment to them is not direct.

There are three ways to connect to a transaction clearinghouse. You can connect with them
through machines capable of card-swiping. Youll find these machines beside nearly every
cash register at any store nowadays. These machines are used to swipe your credit card
and enter the total amount of your purchase. The transaction clearinghouse will send a
verification and then the customer signs the receipt to complete the purchase.

You can also connect to these clearinghouses through a desktop software. There are
business establishments that don't need to see credit cards. They just get the credit card
numbers over the phone, via mail, or through the Internet. The trader enters credit card
numbers and the amounts of all transactions made using this software and this software will
submit the list to the clearinghouse using a modem. This will be done once every two days.
The clearinghouse then responds with a list of good and bad credit card numbers. Then the
merchant replies by accepting the transactions made by the good cards.

There are real time websites which can be used to connect to this clearinghouses. They can
check the customers credit card while he is still online. Or they use a special set-up by the
Internet service provider. But there are still who use internet connections by means of
service bureaus.

Do you have a phone credit card processing? You really could be losing a considerable
amount of sales just by failing to offer the option to pay through credit cards. Start
acquainting yourself with the concept of web merchant account so you can start exploring
your options for getting this account with your bank or a service provider.