Most businesses take credit card payments from their customers on a daily basis, but few think much about it. But as a business owner, if you don’t know what’s involved in payment processing, you can run into trouble when an issue comes up. You may even wonder what is a payment processor?
Here, we’ll answer that very question and look at four other payments processing terms to know;
1. What is a payment processor?
A payment processor manages the credit card transaction process by acting as the mediator between the merchant and the financial institutions involved. A processor can authorize credit card transactions and works to ensure merchants get paid on time by facilitating the transfer of funds. Some payment processing services provide equipment for card acceptance, security solutions, PCI compliance assistance, customer support and other value-added payment processing services.
Different from a payment processor, a payment gateway is an encrypted application that authorizes credit card or direct payments processing for online sales other card-not-present transactions.
2. What is an acquirer?
The acquirer, also known as the acquiring or merchant bank, is the financial institution that maintains a merchant’s account in order to accept credit cards. The acquirer settles card transactions for a merchant into their account. Sometimes the payment processor and the acquirer are one and the same.
3. What is an issuer?
The issuer, or issuing bank, is the cardholder’s bank, which is responsible for paying the acquirer (and subsequently the merchant) for approved credit card transactions and collecting payment from cardholders.
4. What is PCI compliance?
PCI compliance refers to compliance with the PCI DSS, the Payment Card Industry Data Security Standard. PCI DSS is an information security standard that applies to all entities involved in processing, storing and/or transmitting payment card information. Any merchant who accepts card payments must comply with PCI mandates. Failure to achieve and maintain PCI compliance can leave a merchant vulnerable to a data breach and the ensuing negative fallout including fines, fees and lost business.
PCI compliance is complex and depends on various factors. Some payment processors offer PCI compliance tools and assistance to their merchants. The type of offerings can include security checklists, hands-on help, breach coverage and more. Because PCI mandates are updated regularly, it’s a good idea to work with an experienced payment processor that offers a complete PCI compliance assistance program.
5. What are EMV chip credit cards?
EMV chip cards have become more commonplace since the fraud chargeback liability shift that took place in October 2015. The liability shift placed new responsibilities on merchants for card-present fraud. Basically, if a business processes a chip card without using an EMV-enabled terminal, it could be held responsible for any fraud that results.
EMV is not a mandate like PCI (e.g., merchants will not be fined for not using an EMV-enabled device). But it is a necessity for merchants in reducing their fraud and chargeback rates for card-present transactions. It’s important to note, however, that EMV does not protect against a data breach – that’s where PCI comes in. So be sure to ask your payment processor about both EMV and PCI compliance solutions. Now that you know a few of the important payment processing terms, it’s time to be sure you’re working with the right payment processor for your business. A trustworthy and experienced payments processor will provide the information, tools, and guidance you need to securely accept card payments.
A good first step in understanding the process is to review industry terms for the key participants:
Smart Tips from John Haire at Bankcard Processors...
The holiday rush is a wonderful time for business — but it’s also when fraudsters work overtime. With more transactions, online orders, and busy staff, scammers see opportunity. That’s why this time of year is the most important for merchants to stay alert and take simple steps to protect both your business and your customers.
Here are a few ways to keep your payment processing safe this holiday season:
1. Stay Alert to Suspicious Transactions
Watch for unusual orders — large purchases from new customers, mismatched billing and shipping addresses, or multiple cards used by the same person in a short period. When in doubt, verify before you process.
2. Keep Your Equipment Secure and Updated
Make sure your credit card terminals, POS systems, and online gateways are running the latest software updates. Outdated equipment can leave your business vulnerable to breaches or data theft.
3. Train Your Team
Your staff is your first line of defense. Remind employees not to override fraud alerts, skip signature checks, or process transactions when something feels “off.” Encourage them to trust their instincts.
4. Watch Out for Phishing and Account Takeovers
During the holidays, scammers often pose as your processor, bank, or even a familiar vendor. Never share login information, passwords, or account details over email or text — and contact your processor directly if something looks suspicious.
5. Reconcile Daily and Review Chargebacks Quickly
Catching discrepancies early can prevent larger issues later. Daily reconciliations help you spot unauthorized transactions, and timely responses to chargebacks protect your revenue.
At Bankcard Processors, we take your security seriously — from PCI compliance to fraud monitoring and data protection. If you’d like help reviewing your setup or tightening your fraud prevention measures before the holidays, I’m here to help.
This season, let’s keep your business merry, bright, and secure.
This season, I’m helping businesses keep a little more in their pockets. If you haven’t had your processing rates reviewed lately, now’s the perfect time — many of our clients are saving more than they expected.
And if you know another business that could benefit from lower rates and personal service, send them my way — you’ll both enjoy special savings or account credits as our way of saying thanks.
Let’s make sure you and your network start the new year saving smart.
(850) 228-5571
jphaire@bankcardprocessors.biz
When it comes to identity theft and credit card fraud, it's becoming more important than ever to be vigilant and take steps to protect your personal information. Over the last few years, in part due to the COVID-19 pandemic, the fraud rate has skyrocketed. In 2021 alone, the number of adults impacted by traditional identity fraud increased by more than 50%, with 1 in 20 people becoming victims.
These tips can help you spend safely and guard your sensitive data...
1. Consider a contactless card
These credit cards look just like EMV chip cards (they dip into a sensor rather than being swiped). Contactless cards show an image of 4 curved lines somewhere on the card. That tells you that you can tap the card over a sensor when you go to pay—rather than inserting the chip into a reader.
2. Be aware: Zero-liability fraud protection
Credit card issuers offer zero-liability fraud protection. That means if a fraudulent transaction appears on your account, you can alert the card issuer and follow their process for reporting the crime. You won't have to pay for purchases you didn't make. Be sure to check your accounts regularly to make sure that you recognize all of the charges.
3. Set up fraud alerts to monitor your accounts
Setting up alerts can help you manage your accounts—and help you spot fraud. Alerts can typically be set on the card issuer's website or app. Sign up for automated alerts of suspicious account activity wherever offered. It may be a good idea to sign up for alerts via text and email. If an account is taken over, hackers may be able to intercept alerts sent by SMS text or phone call.
4. Alerts can also help you manage your accounts
Card issuers typically offer a number of different alert options. For instance, you can choose to get a text or email anytime a purchase is made on the card, or you can even set a purchase limit that would trigger an alert. You can also request alerts when your balance reaches a certain threshold, when you're near your limit, when the payment date is approaching—and more.
5. You may be able to freeze your account
Some cards allow you to freeze your account for extra security. Recurring payments and rewards are still allowed to go through, plus transactions that were made before the freeze, but any new purchases are declined until you unfreeze the account. The feature can generally be activated online or through a card issuer's app, so you don't even have to speak with anyone to freeze and unfreeze your account.
6. Take advantage of digital wallets
Most smartphones have a digital wallet. You add your credit or debit card information and then you can use your smartphone (or smartwatch) to pay in a brick-and-mortar store or online when retailers offer the option. Digital wallets work by transmitting a unique, random transaction number to the merchant instead of your card number.
Your account information is encrypted in your digital wallet and can only be accessed via password or, with most mobile devices, your fingerprint or facial recognition. And, if your card information is ever lost or stolen, banks can reissue a new one immediately to your phone instead of having to wait days for a card to arrive in the mail.
If you ever misplace or lose your phone, you can lock your digital wallet remotely. Plus, there are no fees for using digital wallets.
7. Follow safe online shopping guidelines
The first step to safe online shopping is to check that you're shopping on a secure website. Look at the URL to find out if it's secure—it should begin with "https" not "http." The "s" indicates that the connection between your internet browser and the company's server is encrypted. You'll also see a padlock icon next to the URL in your browser.
Consider using a credit card rather than a debit card for online shopping. Even if you do everything perfectly, you may end up shopping on a retail site that has been compromised. That could leave your bank account vulnerable.
8. Stay safe while traveling
It can be a good idea to call your card issuer and let them know you'll be traveling away from your usual area. One way financial institutions fight fraud is by declining transactions that seem to be wildly different than your usual pattern. Calling ahead of time can help ensure that you have access to your cards.
Before traveling, consider making a copy of all the cards you carry in your wallet—that way you'll have the emergency phone numbers handy, plus a list of your cards.
9. Practice good internet habits in general
Guarding against hackers and scammers can help keep all of your sensitive information safe.
10. Use all of the security features available and monitor your data
Many companies, including Fidelity, go to great lengths to safeguard customers' information and provide security tools. For instance, Fidelity offers 2-factor authentication, designed to prevent someone from accessing your account, even if they have your password.
Here are a few actions you can take to reinforce those safeguards...
