Didyou know

In 2010 there were over 380 million active credit card accounts in the United States. Credit cards are the most used payment method for online transactions.

Credit Cards are by far the Preferred Payment Method Online...

It is often said that if you aren't accepting credit cards then you aren't in business online. Credit cards have been the default payment option for eCommerce since the start.

How will my business benefit if I accept credit cards as a form of payment?

The greatest benefit is increased revenue. Americans spend billions of dollars each year with credit cards and are likely to spend more at businesses that accept them.

Credit cards are a popular payment method, but they are also one of the more expensive payment methods for merchants to accept. The rates, fees, penalties and other basic information about credit cards is discussed on this page including where these fees come from and why credit card processing rates are more expensive in the Card Not Present environment than they are with the Card Present.


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Credit Card Payments:Payment 101

Credit cards are America's favorite method of payment today. Businesses today that don't accept credit cards are behind the curve, and are costing themselves business. The following page describes some of the most common questions about Credit Card Payment.

Terms to Know

Batching Fee: Each day's credit-card transactions are totaled and sent electronically to the processor in a batch. Some companies charge a fee for this process.

Chargeback: When a customer disputes a transaction for any reason, the sale is debited from the merchant's account until the issue is resolved. The merchant pays an administrative fee.

Discount Rate: The merchant pays a percentage of the sale plus a per transaction fee to the processor for each transaction, which is subtracted from the total sale.

Hidden Fees: Many processors charge fees for maintenance, equipment setup, customer service and batching that aren't apparent when the merchant signs up for the service.

Interchange Fee: The processor pays a percentage of the sale plus a per transaction fee to MasterCard and Visa for each transaction. MasterCard and Visa set these rates for the industry.

Where do credit-card processing fees come from?

In the time it takes to get approval for a credit-card transaction, the cardholder's account data zip through several networks and back to the merchant. To process all that information, MasterCard and Visa charge the processor an interchange fee. That fee is passed along to the merchant as the discount rate.

How and when do I receive money from credit-card transactions and pay my processing fees?

Within 24 to 48 hours of the credit-card transaction, money is deposited electronically in to the merchant's account. Once a month the same account is automatically debited for the amount owed in fees.

Why are rates generally higher for mail and phone transactions than for retail card-swipe transactions?

The rates reflect the greater risk for keying errors or fraud when the card and customer are not physically present for the transaction.


  • Introduction to eCommerce Credit Card Payments.

    Covers the credit card process flow defining each of the "payment players"; reviews payment concepts such as authorizations, settlements, reversals, chargebacks and the credit card association's high risk programs.

  • Introduction to Credit Card Chargebacks.

    Covers the basic information about chargebacks everyone on a risk team needs to know from the manual review staff to the risk manager. Topics covered include basic definitions of chargebacks and other key terminology to the details of the representment process and evidence needed to dispute a chargeback.

  • EMV, chip & Pin is going around the u.s.

    Will the U.S. ever adopt EMV, or are banks and businesses holding out for the next wave of payment technology?

  • positive economic signs for ecommerce.

    U.S. eCommerce forecasts predict strong growth over the next five years as credit card ownership increases for the first time in years.

Credit CardPayments

  • Credit Card Payments How important is it to take credit cards if you are doing business online; what can you expect from accepting credit cards online?
  • Understanding the Players In this section we will discuss each of the major players in terms of what their role is, which other players they associate with or represent and how they make money.
  • Credit Card Money Flow Learn how money is exchanged between the players within a credit card transaction.
  • Chargebacks and Fraud Liability
    In the card-not-present world the merchant is typically the one paying for the fraud. They already paid and lost the goods, all of the overhead costs they spent on the order, and they will still have to pay a charge-back fee.
  • Credit Card Payments 101 Get answers to common questions about deciding to take credit card payments online.
  • Are you overpaying for credit card processing? Don't be fooled by a really low rate, there is more to your "total cost" for credit card processing than just the rate. Dig under the covers, and negotiate on all the fees.

    The Fraud Practice