A third-party payment processor is a financial institution or company that helps online businesses store and process their customers’ credit card information. They do this to facilitate one-time and recurring payments for products and services.
This helps your business avoid having to store the sensitive information, which can lead to breaches or other problems. Knowing what they are and why they are important can help you make responsible choices when it comes to choosing a payment processor.
“A third-party payment processor is a financial institution or company that helps online businesses store and process their customers’ credit card information.”
Every day, online business owners have to deal with the difficult task of storing sensitive data in an attempt to provide their customers with a better shopping experience. With the number of online stores growing each and every day, it is becoming increasingly difficult for owners to figure out how they’re going to handle all that data and payment information.
One of the most popular solutions to this problem has been third-party payment processors – companies that specialize in safe storage and processing – and it is one that has worked well for many businesses.
Third-party payment processors help online retailers and entrepreneurs in a number of ways: they provide safe and secure storage for credit card information, they allow business owners the ability to accept all types of cards (Visa, MasterCard, etc.), they give access to processing features like recurring billing and settlement options, and they provide assistance when it comes to dealing with chargebacks.
Chargeback Fees: Can You Afford Them?
One of the biggest advantages that most third-party payment processors offer is the ability to accept recurring credit card payments for their store’s products and services. Recurring billing is a great way for business owners to automatically bill their customers once or twice per month without having to do anything else.
However, there is always the possibility that whoever made the recurring payment won’t like what they receive during one of their billing cycles and they will request it be canceled and/or their money be returned.
If this happens, the third-party payment processor may decide to issue a chargeback refund on your business’s transaction and you will be forced to pay for it out of your own pocket. This is why it is so important that online merchants understand all the fees associated with their payment processor before signing up with them – and to keep a close eye on any changes that might be made in the future.
Knowing what you’re getting into is just as important as knowing what your third-party payment processor can offer your business – especially when it comes to chargeback fees.