What is an ACH Bank Transfer, and Other Common Small Business Commerce Questions

Posted by on August 5, 2014 in Financial Services [ 0 Comments ]

What is an ACH Bank Transfer, and Other Common Small Business Commerce QuestionsACH. Payment gateway. Chargeback.

If you’re new to accepting credit cards for your business, or on the cusp of deciding to do so, you might feel overwhelmed by these foreign terminologies. You probably want answers to questions so you can accept credit cards confidently, without any surprises by unrecognized fees on your monthly statement.

So let’s look at some of the questions you may have about your merchant card processing and clear up the fog.

What is a Chargeback?

If a customer goes to his credit card company and says that you didn’t deliver what you were supposed to in the transaction, the credit card company will charge back the amount of the purchase from you. Certainly, you’d prefer the customer come directly to you if there’s a problem, and sometimes the fraudulent claims customers take to the credit card companies aren’t even valid. So it’s good to be aware of the possibility that customers can get their money back, whether they deserve it or not.

What Will I Pay to Process Credit Cards?

Every merchant card processing service is different, but typically you can expect to pay some or all of the following fees:

  • A percentage of each transaction
  • A flat fee per transaction
  • Monthly maintenance fee
  • Regulatory or compliance fees
  • Monthly minimum fee

Shop around before deciding which company is right for you. Compare not only costs but also offered features.

What is an ACH Bank Transfer?

Essentially, this is a transfer from one account to another. ACH stands for Automated Clearing House, which is the electronic network that handles all of the financial transactions in the US. You may receive your credit card batch payments through ACH, or use it for paying your staff via direct deposit.

Can I Use my Card Processing Service for my Online Transactions Too?

Some credit card processing companies offer both the physical card swiping unit and online ecommerce services, but ask a vendor before you sign up if you want both.

Do All Card Processing Services Cost the Same?

No, and not all offer the same services. It’s important that you know exactly what you need and find a company that offers everything you’re looking for. Consider whether you need to:

  • Accept card payments on the go
  • Have online ecommerce transactions
  • Need more than one card swiper
  • Find a service that caters to a low number of monthly transactions

Should I Worry About Credit Card Fraud?

You should definitely be aware of it. After all,  in 2013, there were more than 11 million credit card fraud victims in the US. Credit card processing companies are making constant strides in the technology they offer to protect merchants like you, but you can also take your own extra measures to protect your company. If you’re getting red flags with a purchase, ask to see ID. Requiring customers to use a PIN for transactions can also reduce fraudulent transactions.

Accepting credit cards is a great way to grow sales for small businesses, but make sure you educate yourself on the industry and know what to look for in a merchant card processing service.

Author Bio: Jaimie Yun has more than 15 years experience across financial sectors of public accounting, corporate finance and more. She is on the advisory board of PayDemand.com, a credit card processing marketplace that allows businesses to compare multiple credit card processing rates and get the best offer while remaining anonymous to processors. Connect with Jaimie on Google+ and follow PayDemand onTwitter.

(image via freedigitalphotos.net)

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