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A Quick Guide in Payment Processing Services and Terms

Posted on January 19, 2023 by Ron Reginal

Most successfully businesses use a number of third party payment processing services to process their charge card orders on Internet, since this won't require to secure a direct merchant account or even to setup expensive ssl certificates. Another party payment processing services handles payment by charge card (and usually are designed for checks along with other types of payment aswell), and sends owner a monthly check or wire transfer, minus various processing fees, which change from service to service.

These third party payment processing solutions supply the seller a web link to a secure webpage where they are able to redirect their customers to, for completing the order. As the method has benefits, in addition, it has disadvantages.

Below I'd like to create an introduction of the essential terms and concepts utilized by the typical payment processing services, to greatly help sellers get to know what they have to compare whenever choosing an payment processing service.

Payment Cycle

The time interval where orders are taken for just one payment. Could be monthly, bimonthly, weekly, etc. After every payment cycle ends, the payment ought to be sent to owner.

Payment Hodling Time

Unfortunattely every payment processing service deliberately holds the payment for an period of time that varies between a couple of days up to almost a year. They don't send the payment soon after the payment cycle is finished, but rather they contain the payment for the specified payment holding time. They state this is to safeguard them against fraud, chargebacks, looked after helps them with increasing their profit ( by holding the amount of money in bank for a pastime ). For instance, for a payment cycle and a payment holding time of 15 days, the amount of money caused by orders during October will undoubtedly be delivered to you on or after 15th November. This is simply not a large issue if the payment holding time isn't long, however, many services have a payment holding time of 2 months or even more, and you may receive your payment for October sales in January another year.

Payment Processing Day

Is the date of the month ( for montly payment cycles ) once the payment cycle should end, and the payment calculated. Usually this is actually the last day of the month, however, many services enable you to specifically set it.

Signup Fee

The fee for signup. Some charge non-refundable fees, other application fees, other usually do not charge a fee at all.

Transaction Fee

The per transaction fee, usually a share with the very least fixed value.

Chargeback Fee

When a chargeback occurs (it happens in the event of fraudulent orders or once the customer isn't satisfied with the merchandise) not just that the payment processing service takes back the quantity of the order, but it addittionally charges you with a chargeback fee.

Some payment processing services have additional fees, such as for example product download fee (for virtual goods), monthly fee, statement fee, refund fee, wire transfer fee, contract canceling fee. You should inquire further about each one of these fees, because most services usually do not clearly specify it on the site nor in no problem finding documentation; and you also may have unpleasant surprises later if you don't. Especially with the payment holding time, it's disappointing to anticipate to receive the initial payment merely to learn that it'll be delivered to you months later.