Exploring Third Party Payment Processors

Third party payment processors are growing in popularity. More and more merchants are utilizing third party payment processors for Visa card processing and Mastercard processing because they are easy to set up and are low maintenance. The content below will enable a merchant to choose if a third party payment processor is definitely the right choice.

What Is a Third Party Payment Processor?

A third party payment processor is a tool that allows a merchant to accept payments without needing to go through the process of applying for a merchant account. A third party payment processor can be integrated with a website, as many have free shopping carts and buy now buttons that you can put on your website. Many of these features are free and make it so customers can purchase from merchants quite easily.

What Does a Third Party Payment Processor Do?

A third party payment processor enables merchants to accept payments with ease. Third party payment processors do have merchant accounts that operate under their companies that are used to process various transactions for merchants. Each time a customer pays for goods, the money then enters into an account that the merchant has with the third party payment processor. In the event the merchant wants the funds, he or she can transfer it into the bank account that's connected to the third party payment processor account.

Examples of Third Party Payment Processors

There are several third party payment processors that a merchant can consider. Here are examples of the best and most popular ones.

• 2CheckOut, Inc.
• Google Checkout
• Paypal

Paypal and 2CheckOut, Inc. have merchant accounts for merchants who outgrow the basics. All three of the third party payment processors right here have proven track records, allowing merchants to be able to put implicit trust in them.


Pros and Cons for Third Party Payment Processors

Before a merchant decides whether or not a third party payment processor is the right choice for his or her business, pros and cons have to be considered. To enable merchants to make an educated decision, some advantage and disadvantages of payment processors are listed below.

Benefits of Third Party Payment Processors

• A variety of free shopping carts
• Options which facilitate recurring Billing 
• Integration of the shipping costs
• Integration with the design of the merchant's website 
• Support for digital products
• Low monthly fees or no monthly fees at all

Disadvantages of Third Party Payment Processors

• Higher transaction fees--four to five percent
• Some require customers to get an account (This type of requirement could potentially cause a merchant to give up sales, especially if a consumer does not want to register.)
• Sometimes will not fit with certain website designs

Since a merchant understands enough about third party payment processors in making an informed choice, there are a couple of things that can be done to insure that the merchant chooses a solid company that will provide merchant services. Talking with other colleagues and doing some background research on each company will insure that this merchant makes the smart choice. Once the choice has been made, the merchant has the ability to run his or her business with no trouble. Click here to find out more about third party payment processor.

Avoiding Debit and Credit Card Skimming

Having a merchant account can benefit virtually any type or size of business, as this can be an ideal way to process transactions conveniently and quickly. Credit card processing, however, is not completely without risk, as individuals intent on committing fraud may attempt to skim electronic information for their own gain. While skimming may create all types of problems for victimized consumers, a retail establishment may suffer losses by way of damaged reputation, customers, and revenue.

Skimming Defined

Skimming involves the electronic capture of customer credit card information by way of a handheld device, or through a stationary device placed where credit or debit machine transactions occur. Accordingly, the captured information is sold in order to create counterfeit cards and access unsuspecting customer accounts. As a business owner, your merchant services may be viewed as unsafe if the fraudulent activity happens at your location but this website will help you avoid such incident.

Where Skimming Occurs

While skimming may occur at virtually any retail outlet that processes credit or debit card payments, certain types of establishments are often more susceptible than others. This may be due to a variety of internal or external factors that are inherent to certain establishments in particular. Security, or the lack of it, may also make certain businesses more vulnerable than others, but the following are often viewed as likely targets:

• Bars
• Gas stations
• Restaurants

Minimizing your Skimming Risk

There are many ways to reduce your exposure to such fraudulent activity, and such safe practices may be used by merchants as well as consumers. As a merchant, you would be wise to consider the viewpoint of your customers when you select any merchant account procedures. This should include reviewing safe practices with your employees, and carefully monitoring who has access to credit card information. Good ways to avoid credit card skimming include:

• Keeping the credit or debit card in sight of the customer
• Treat the card as if it were cash
• Monitor receipts and store them securely

If you can avoid having your employees processing transactions out of customer view, this may safeguard both you and your customers from being victimized by employees intent on skimming. Remembering that your merchant account processing is tantamount to handling cash from the viewpoint of your customers may underscore how important it is to be careful who you let access your credit or debit machine.

Choosing a Merchant Account Provider

Choosing a reputable merchant account provider is a straightforward way to end up with a quality product for your establishment. Setting out your merchant account device is but part of the equation when it comes to accepting payments in this manner. Communicating with your merchant account provider about ways to minimize risk may make your merchant account a wonderful feature for your business.

Why a High Risk Merchant Account may be Needed for your Business

The average business can complete an application for a regular merchant account, but there are some businesses that cannot be approved. A business that cannot qualify for a standard account may find that a high risk merchant account is the right choice. Knowing the reasons why a business would want to apply for these merchant services takes an understanding of the benefits that are available.

Why Your Business May Want a High Risk Merchant Account

There are several reasons why these accounts may be helpful. The ease of credit card processing is a standard for many businesses and the money received is transferred quickly after a sale is made. Having a business that is classified as a high risk operation needs better approval rates. Trying to get approved for a standard account is hard to do and this is one of the main reasons that a company can benefit from applying for a high risk account. A business can sign up without hassle and receive an approval instantly.

Types of Businesses Needing a High Risk Merchant Account

A business can be classified as high risk due to several factors. Any company that has a high turnover rate of employees or that sells products or content that may be classified as high risk. A company that is in an industry where fraud is likely will typically be put into the category of high risk for Visa processing and Mastercard processing.

These are examples of businesses that are classified as high risk:

• Adult Entertainment Companies
• Cigarette Vendors Online
• Sales of Telecommunications Products
• Website Hosting and ISP Companies
• Telemarketing Businesses
• Male/Female Escort Companies
• Insurance Sales
• Detective and Research Services
• Collections
• Cell phone Sellers and Distributors 
• E-Cash Funding Services
• Software Companies Selling Downloads
• Check Cash and Payday Companies

There are many more companies that are considered riskier when applying for merchant services. This shortened list is used as a general guide for a merchant looking to make an application for a high risk merchant account to have an idea of what to expect in comparison of other companies.

Choosing a reliable and reputable company like this when applying for credit card processing is important. Using a company that has a track record of success and reliability will keep a merchant from losing money or having illegal activity performed with their account. Performing an in-depth search online will help a business owner when looking for a reliable processing company. Reading reviews posted by current merchants and asking questions to other colleagues will help provide excellent information about the best merchant services. Working with a trusted company for credit card processing allows a business to have reliable Visa processing and Mastercard processing services. When the right system is in place, businesses will operate smoothly and money from sales and services will be easy to collect.