Before taking the
plunge, aren’t you the least bit interested in learning more about the
bank card world? Unless you are a banker, there are probably many
things to learn regarding the industry. How card processing
came about, who processes the actual transaction, what influences
processing costs. These items will be covered in the next four chapters.
OUR LOVE AFFAIR WITH THE CREDIT CARD
You, me, and most every adult in the United States is in a
scandalous affair. With their credit card! What are the 5 key
benefits that attract consumers and merchants alike? How can
this knowledge help your sales efforts?
MERCHANTS AND CONSUMERS
There are only two types of people in the processing word.
Those who use credit cards and those who accept them. Many
times one person can be both! We will take a look at the
needs, concerns and issues of each, and see how one influences
HOW CARDS ARE PROCESSED
Our final topic of conversation is in introduction to how
payment cards are processed. We will track the dollars from
consumer to merchant, and demystify the process. Thus armed,
you will better understand the value which you will bring to
the merchant, from both a financial and service perspective.
iProcess - Knowing the Payment Industry
Chapter 9 - Transactions, Consumers, and Merchants
sale has five basic obstacles: no need, no money, no hurry, no desire,
Consumers, Merchant’s and the ‘Consumption Cycle’
These five benefits outline the reasons behind the popularity
of one simple activity - pulling out a credit card and making a
Again - more purchases are made today using a plastic card
than by using cash. The ratio is almost a staggering two to one in
favor of card based transactions.
Consumers use cards to…um…consume.
This cycle of consumption is ongoing. Simple sales occur on a
frequent basis, more complex sales less frequently. Yet every type of
sale can occur on a credit card.
Let’s look at how a sale, or better yet purchase, occurs
A sales that takes place via the use of a credit card
It’s time to discuss three things in play…the consumption
cycle, the consumer, and the merchant. This is what each is
and how they interact with one another.
The Consumer: Any
person, place or thing lacking products or services necessary to
function and must obtain them from another person, place or thing is a
consumer. You are a consumer. So is your spouse, aunt or friend. So is
Disney Land. So is the government. We all must acquire products and
services from others in order for us to survive.
Any person, place or thing supplying the products and services
necessary to function for other persons, places or things AND requires
card processing abilities is a merchant. Merchants today are tied to
card payment ‘acceptance’ as most consumers prefer this as a means to
make purchases. It is also a key concern item for most businesses. As
such, there are many concerns and even fears associated with changing
Cycle’: Consumers do one thing VERY well. They consume.
Food, cars, clothing, gas, houses, trips, you name it…they consume it.
Merchants are in business to satisfy the needs of the consumer. As long
as consumers create a demand for a product, a merchant will provide a
solution in the form of a product or service.
The take away…merchants and consumers are here to stay, and
each affects the other. You should understand a potential merchant IS
ALSO a consumer when YOU are selling a service or product. Make certain you speak to the needs, concerns, and
issues of your customer. Take time to understand them before offering
HOW CARDS ARE PROCESSED
Since we know there is a need for merchants to accept credit
cards, how are merchants set up to accept payments? How do consumers
get a credit or debit card? Who makes money when a card transaction
Getting a card is simple. Go to the bank, . . .