01/16/2015
Merchant Services, or better known as credit card processing is the handling of electronic payment transactions for merchants. Merchant processing activities involve obtaining sales information from the merchant, receiving authorization for the transaction, collecting funds from the bank which issued the credit card, and sending payment to the merchant.
Back in the good old days, when life was much simpler, “merchant services” was limited to the following scenario:
John Doe walks in to Sam’s Supermarket and makes a purchase. Being that John and Sam were good pals, Sam had no problem extending “credit” to John. Sam would write down the amount of the purchase in his “little black book” and collect the balance at a later date.
Since this model was driven by Sam’s personal relationship with John, if John were to walk in to an unfamiliar store on the other side of town and request credit, he would probably find himself in the uncomfortable position of being shown the front door!
Wouldn’t it be great if there were some sort of system that would allow merchants to extend credit to their unfamiliar customers without exposing themselves to risk?....
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