Merchant Accounts & Credit Card Processing

Video Transcript

"This is Patrick Munro, Financial Advisor, talking about how merchant credit card processing works. In the modern day world of commerce, businesses that are progressive are offering credit cards as a form of payment to their customers. The way it works is when someone comes into a place of business and they choose a product or service, and pay for it with a credit card, the credit card will send the, the company will send that credit card request into a credit card company. The credit card company will then use its money to instantly pay the bill for the product or service. They will, however; charge a fee to the merchant for this particular service. Visa and MasterCard are the biggest credit card companies, so their fees are somewhat lower; however, American Express will charge a higher credit card fee, because of normally they bring in a larger paying customer. It's a cost of doing business to the firm, and it it just allows them more payment options for their customers. This is Patrick Munro, talking about the benefits of credit card payments to businesses."