Payments 101
What Is Merchant Processing?
Merchant processing is the system that authorizes card and digital payments, moves transaction information between the business and financial networks, settles approved funds, and gives the merchant reporting and support tools.
What to know
Practical guidance for a clearer decision.
Authorization
The terminal, POS, website, or invoice sends encrypted payment information through the processor and card networks for an approval or decline.
Settlement and funding
Approved transactions are grouped for settlement, adjusted for applicable fees and exceptions, and deposited according to the merchant agreement.
Rates and fees
Costs may include percentage rates, per-transaction charges, network and interchange components, monthly fees, gateway fees, PCI-related charges, and chargebacks.
Technology and support
The complete environment can include merchant accounts, terminals, gateways, POS integrations, virtual terminals, reporting, security tools, funding, and service.
Keep exploring
Connect the guide to your operation.
Merchant questions
Frequently asked questions.
What is a merchant account?
It is an account arrangement that enables a business to accept and settle electronic payments under agreed underwriting, pricing, funding, and operating terms.
What is an effective processing rate?
It is the total processing cost for a period divided by the card volume for that same period. It is useful for comparing overall cost, but the underlying fees and assumptions still matter.
How do I compare merchant-processing proposals?
Use the same statements or projected volume, separate percentage and transaction charges, list every recurring fee, include equipment and software, and compare contract and support terms.