Today when shopping is concentrated over Internet as well as in physical, payment using credit or debit card is common. A bank account that helps the businesses to accept credit cards for payments is called a merchant account. The card payments can be processed only through a Merchant account. If a person dealing with the business and its card payment does not have a merchant account, then the payment is done though a third party, who in turn has a merchant account. However, a transaction fees called the “service tax” gets included during that transaction.
Credit card payment is done using a card terminal, where the card in swiped to initiate the processing. As the swiping is done, the card information is thus read. These credit card machines are wired and are connected to the power supply and the telephone line. As a credit card is swiped, the card terminal contacts the network to verify the authorization of the card. The machine then either uploads the electronic funds to the merchant bank directly, or the service provider dials, collects, processes and then submits the data to the merchant bank.
Nowadays when it has become mandate for the customer to enter the authentication PIN number, the wireless credit card machines are becoming more common, since these can be carried to the customer rather than the customer being asked to move to the seller. Even in online shopping with “cash on delivery” options, the person who delivers the item, carries a wireless credit card machine along, so that the card payment can be done at the customer’s doorstep.