The three main methods of credit card processing include retail, keyed and e-commerce transactions. Retail credit card transactions are often referred to as the ‘swiped card’ method of processing which occurs when the credit card holder presents their credit card to the merchant at their flat rate payment processing business premises. Here the credit card is physically swiped on the merchant’s processing device and the transaction is authorized or declined. The availability of new wireless devices allows the business to extend its credit card merchant facilities to customers on site and away from the retail premises.
The keyed option is the primary method of merchant processing for business that usually do not have physical interaction with the customer. These businesses conduct business primarily via telephonic or faxed orders. The customer will provide the relevant details either telephonically or in print on an order form and the retailer will utilize their merchant services facilities for immediate payment. The advantage of keyed credit card transactions is that it allows the retailer to reach customers through print media such as snail mail, catalogues, newspapers and magazines as well as telephonically. Keyed processing also ensures that the retailer is guaranteed payment prior to processing the customer’s order.
E-commerce involves credit card processing over the internet. These transactions occur in real time and allow for non-stop transacting for the merchant as the customer is able to make purchases and payment via the retailer’s website anytime of the day or night. E-commerce couples convenience for the customer with twenty four hour a day trading for the retailer. A merchant account allows the retailer to provide secure online transactions for immediate payment prior to the processing and dispatch of the customer’s order.
Many retailers with credit card merchant accounts do not realize the full potential of these facilities. By adapting their business model to take advantage of all three transaction methods, the retailer can ensure consistent sales on a global basis with less administrative costs. The appeal of credit cards is due to the flexibility and convenience of ‘plastic’ compared to any other monetary tool of recent times. Understanding the types of transactions that can be conducted with a credit card is important for both the merchant and credit card holder. The business edge of harnessing the different types of processing methods can often add a new dimension to a traditional retail outlet.