Merchant Account Payment Gatways
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Online Payment Processing
When you go into any retail establishment and swipe your credit or debit card, the merchant is charged a small fee. This fee is based on the general level of risk in the industry. What do we mean by risk? Well, the most expensive single fee for merchants is called a chargeback. A chargeback is when a customer requests a refund for an item he purchased.
If a chargeback is approved, the bank with which the merchant has an account will be forced to offer a refund to the customer’s credit card company. When this happens, the bank will not only charge the merchant for the refund, but they will also issue a fine to compensate them for the time they spend resolving the case.
In this article we will discuss online payment processing. We began with the chargeback for one simple reason—it is the single most obvious obstacle to success on the internet. You see, chargeback fees on the internet are out of control. For some online business, chargebacks are simply a way of life.
Why are they a problem online? One of the most common errors is called the double charge. This occurs when a customer enters his credit card information and hits the submit button several times. On occasion, the payment will be recorded twice. Later, when the customer realises what has happened, he often files for a chargeback.
What does this mean to online sellers? Well, quite simply, it means that they can expect to be charged higher commission fees than regular brick and mortar shops. Fees of up to nine percent per transaction are not at all uncommon.