Question 1

How does credit card payment processing work?

Accepted Answer

When a customer pays by card, the transaction is securely sent for authorization through the payment processor, card network and issuing bank. The issuer approves or declines the transaction, and approved transactions are later settled so funds can be deposited into the merchant's bank account.

Question 2

What is the difference between a payment gateway and a payment processor?

Accepted Answer

A payment gateway securely captures and transmits payment information, particularly for online transactions. A payment processor manages the communication needed to authorize, clear and settle the transaction.

Question 3

What is a merchant account?

Accepted Answer

A merchant account is part of the infrastructure that enables a business to accept electronic card payments and have approved transaction funds settled to its designated bank account.

Question 4

What is interchange and why does it affect my processing costs?

Accepted Answer

Interchange is a component of card acceptance cost. It varies based on factors such as card type, transaction method, merchant category and transaction information. Understanding interchange is important when evaluating the total cost of accepting cards.

Question 5

Why can two businesses have different credit card processing costs?

Accepted Answer

Processing costs vary based on card mix, average transaction size, how customers pay, merchant category, transaction data, chargeback risk and the processor's pricing structure.

Question 6

Can my business reduce its credit card processing costs?

Accepted Answer

Often, yes. Opportunities may include reducing processor markup, eliminating unnecessary fees, improving transaction qualification, selecting appropriate payment technology and choosing a pricing structure that better fits the business.

Question 7

What is a payment processing statement audit?

Accepted Answer

A payment processing statement audit reviews your current processing costs, including processor markup, recurring fees, transaction charges and interchange-related expenses, to identify potential savings or inefficiencies.

Question 8

What does a payment gateway do?

Accepted Answer

A payment gateway securely captures payment information and transmits it for authorization. Gateways are commonly used for ecommerce, invoicing, virtual terminals and other card-not-present transactions.

Question 9

What is PCI DSS and why does it matter?

Accepted Answer

PCI DSS is the Payment Card Industry Data Security Standard. It establishes security requirements designed to protect payment card data and reduce the risk of data exposure and payment fraud.

Question 10

What is a chargeback?

Accepted Answer

A chargeback occurs when a cardholder disputes a transaction and the payment is challenged through the card issuer and card network process. Chargebacks can result from fraud, customer disputes, processing errors or dissatisfaction with a purchase.

Question 11

How do I choose the right payment processing company?

Accepted Answer

Look beyond the advertised rate. Consider pricing transparency, technology, support, contract terms, funding, fees and whether the provider understands how your business accepts payments.

Question 12

How does Selective Payments help businesses evaluate payment processing?

Accepted Answer

Selective Payments reviews how your business accepts payments, analyzes current processing costs and technology, identifies potential inefficiencies, and evaluates payment options based on your actual business needs.

Payment Processing FAQs for Businesses

How long does the audit take?

Is there any obligation?

What do you need from me?

Do I need to switch payment processors?

What types of businesses do you work with?

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