Merchant Payment Solutions – it’s more than just accepting credit and debit cards

merchant payments

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I often joke – never mug a banker since we never carry cash!  As a consumer, you know how important it is to be able to use a credit or debit card when making purchases. In fact, it’s surprising how many people don’t carry any cash on them and not every business will accept a personal check – although less and less people are using those as well! So as a business owner, whether big or small, a startup or seasoned, you know that accepting credit and debit card payments from your customers is crucial to your all around success.

Accepting credit cards isn’t as simple as just swiping a card – at least not from the merchant end. Credit card associations (i.e., Mastercard, Visa, etc.) charge a fee known as interchange every time their cards are used, and you’ll also have to sign up with a merchant service provider to actually process those cards – those fees vary by company and are dependent on the equipment needed as well. It’s important to make sure you choose a company that understands your needs. While it may seem complicated to get everything set up, your merchant service provider can easily walk you through everything.

You don’t need to understand the exact details that go into a credit card transaction but understanding a few simple steps can help you avoid some of the common problems that can result when a transaction doesn’t go smoothly.

  • Once your customers credit/debit card information is entered, it’s sent to your provider’s processing system for approval. Your provider will check to make sure that the funds are available to cover the transaction. Debit cards require checking the remaining balance on the banking account linked to the card whereas credit cards require that the cardholder isn’t exceeding their available credit limit. There are also some anti-fraud checks that take place to make sure the card isn’t stolen. If everything checks out, the transaction is approved.
  • Depending on your set up, all your completed credit/debit transactions will automatically be uploaded to your processor’s network for processing at the end of the day. Fees will be calculated, deducted, and you’ll receive whatever is left over which is usually deposited into your bank account within a few days.
  •  No matter how secure your business is, fraud is always a risk. This includes the use of fraudulent cards or cybercriminals hacking into secure processing systems. As a merchant, make sure you are very careful where you store any customer data and who has access to it. Train your staff on how to spot fraud.

Not only do credit and debit card transactions increase your sales, but they add a whole new dimension to bookkeeping and the auditing processes for your business. Obviously, this means more work on the accounting side to make sure everything reconciles, but this also means more transactions by making it more convenient for people to shop at your store or eat at your restaurant, the increase in revenue will likely offset these costs.

For many merchants, the initial investment and the recurring fees become a manageable and necessary aspect of doing business.  Credit and Debit transactions also provides some great data. You track inventory based on credit card transactions and many businesses are able to anticipate exactly what recurring customers need before they even have to ask based on past purchases. What a great inventory tool!   There is also an increased security component because as you get to know your regulars, you’ll know if they are using a fraudulent card to purchase or if their card is being used by someone else.

Merchant services help you identify purchasing patterns – this could be seasonally, spikes due to popularity, etc. This will help you better staff your business and stock items, so you don’t run out.

Partnering with a merchant service provider isn’t just about getting the best price on your merchant service fees. It’s about working with someone who understands your business needs, makes things easy, and will help you get the most out of their services including training you and your staff.

At Litchfield Bancorp we believe in powering payments to grow your business. It doesn’t matter how big or small your business, we make your payments easy. To learn more about our Merchant Services, you can visit our website or stop into or call any of our branch locations.

Mickie-Ann Budny
Litchfield Branch Manager, Vice President