Common Credit Card Processing Terms Defined!
Credit card processing terms can be a little confusing. The payments industry has its own lingo and some of the terms can be difficult to understand. Understanding general terms can really help you get the best services for your business. Many companies that provide payment processing aren’t fond of letting their customers know what goes on behind the scenes. The more confused you are, the easier it is to add in unnecessary fees.
We enjoy educating merchants so that they can make the most informed decision for their business. Below is a brief list of important terms that are commonly used in the credit card processing industry. This list will help you comprehend the institutions that you will encounter as you do your research for the best solution for your business.
Do you have a debit or credit card? Chances are you do! If so, you are very familiar with this role. A cardholder is a person who holds a card from an issuing bank. This card is what is presented as a form of payment during a sale.
These are the financial services that are authorized to allow businesses to accept both credit and debit cards, either online or in-person. Any business that wants to accept credit cards must have a merchant account in order to do so.
The issuing bank is the cardholder’s bank. These banks issue cards to cardholders. Issuing banks pay the acquiring banks for the purchases the cardholders make.
Card brands facilitate credit and debit card payments. This process happens when the card brands essentially lend funds to the merchant that are later reimbursed by the cardholder. The card brands are organizations that issue cards to cardholders, they generally are made up by Visa, MasterCard, Discover and American Express.
Independent Sales Organization (ISO)
This is a 3rd party organization that banks authorize to handle merchant services accounts for businesses. Banks have the ability to offer their own merchant services for businesses, but most of the time you will experience better support, advanced technology and lower rates with ISOs.
An acquiring bank is the merchant’s bank. These banks are responsible for holding the merchant’s funds and acquiring the money from purchases made. In relation to credit card processing, acquiring banks accept the money from a transaction as soon as the card is authorized and then deposits those funds into the merchant’s business bank account.
Interchange is a charge that issuing banks apply in exchange for a cardholder to be able to use a card as a form of payment. This charge is applied to every merchant, regardless of their industry or size.
Redde Payments is one of the only ISOs that is completely dedicated to the success of your business. We have leading technology and real-person support that is committed to customer experience and satisfaction! With us you can keep your business both competitive and innovative. If you’re ready to make the switch, you can fill out our online application here: Online Application.
If you want to talk to one of our experts you can email us at firstname.lastname@example.org or call us at 1.800.783.0965. Let's get your business processing payments the way it should!