Credit Card Processing for Newbies


If you’re new to credit card processing, TransFirst® welcomes you! As a reputable full-service merchant services provider with years of experience, we know that a well-educated merchant is our best customer. We also know that credit card processing may seem like a foreign language to many newcomers, so we do our best to simplify the process for you.

Before a merchant can start accepting credit cards, they must have an account with a credit card processor. This is referred to as a merchant account. The type of merchant account required depends on the type of credit card processing the merchant wants to do: POS (point of sale) retail, mobile, online, wireless, phone, mail order/telephone order (MOTO), restaurant, lodging and so forth. Merchants involved in more than one type of operation may require more than one merchant account.

Credit card processing is a complex series of events that begins when the card is swiped through or dipped in a (POS) system and concludes when the proceeds of the sale are deposited into the merchant’s bank account. What transpires in between these two end points involves three different parties: the merchant, the payment processor and the issuing bank.

With one simple swipe or dip, cardholder and account information enters the system and is securely transmitted to the processor. The processor acts as a middleman between the merchant and the bank that issued the card, who approves or declines the transaction after checking the cardholder’s credit line. The processor is notified and passes the decision along to the merchant. If the transaction was declined by the bank, the transaction ends. If approved, the merchant concludes the sale and issues a receipt to the customer. Thanks to state-of-the-art technology, this portion of the transaction takes just seconds.

Once authorized and completed, the transaction is closed out by the bank, which issues payment to the processor and bills the cardholder for their purchase. The processor deposits the proceeds into the merchant’s account, usually within a couple of days.

There are two basic types of credit card transactions: card present and card not present, abbreviated CNP. Card present transactions are typically done face-to-face and require that the card and cardholder be physically present. These are considered the most secure of all credit card transactions and carry the lowest credit card processing fees. CNP transactions are sometimes referred to as keyed transactions because the cardholder and account information are entered manually, either at a terminal or on a website payment page. Processors and banks consider these transactions to be riskier and the processing rates are correspondingly higher.

Now that you have the basics of credit card processing under your belt, it’s time to talk to a merchant services provider to acquire the specifics, including what type of merchant account and processing best suits your needs and how much it will cost. TransFirst has specially-trained representatives standing by to answer your questions and guide you in the right direction.


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©2017 Total System Services, Inc. TSYS® is a federally registered service mark of Total System Services, Inc. All rights reserved. TSYS Merchant Solutions is a registered ISO/MSP of Wells Fargo Bank, N.A., Walnut Creek, CA; Synovus Bank, Columbus, GA, and First National Bank of Omaha, Omaha, NE. TSYS Business Solutions is a registered ISO/MSP of Wells Fargo Bank, N.A., Walnut Creek, CA; Synovus Bank, Columbus, GA; and Deutsche Bank, New York, NY for Visa and Mastercard transactions only.

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