What is the whole payment process, and is there a fee taken?
In this article, we are going to be discussing what payment process steps are and if there any fees were taken. Also, we will discuss the cost to accept the payment made by card using a mobile phone.
What are the payment process steps?
Payment processing is a thing that will make sure that everything is going in order. This will make sure that the card and its holder are legit and real owners and where to take card payments. Then it will start the process by sending an intimation to the bank about the whole process. After the issuing banks’ approval, it will start the process to make money from the customer. Below mentioned are the steps involved in the payment processing of a customer to the merchant bank.
- The customer will first search the online store for the product that they want.
- Then they will select the product which they want and click on the purchase now and make payment with a card.
- The credit card is either swiped at the store or is paid through an online gateway.
- Then the card is getting authorized by the issuer’s bank as well as the merchant bank.
- The card and the payment method are then processed and protected by the merchant provider.
- The card processing company will send the money to the merchant account where it is stored.
- Then after its storage, the money will then get transferred to the merchant’s bank account.
- At the end of the month, the whole payment detail is sent to the merchant in a document.
How much is the charge to accept card payment through a mobile phone?
To accept payment through the mobile phone, there is three main pricing model that is used commonly. You can decide the model which is best suited for your business according to the way it works. Also, you will have to look at the number of transactions and sales that your business does in a month.
If you are working with a big company like Square, SumUp, and PayPal. You have an option to pay for two of the fees, and there is also an option to pay for the third one. Below mentioned are all of the three price models.
- Flat rate pricing
This is a very easy method and is used by many people in their daily transactions. The total process value for the business is less than $3000 a month. Also, there are no extra charges nor a very lengthy contract to sign before using this system.
- Interchange plus pricing
With this system, the merchant is known to pay the amount on the wholesale rate along with the fees. The wholesale rate consists of the interchange fee, which is set by the issuer’s bank on the card. This is a negotiable charge which can be talked about between the merchant and the customer.
- Tiered pricing
This mainly categorizes the payment into the category in which it falls in. It can either be under the debit or the credit card transaction category.