If you are an online business owner, third party payment processing agreements are something you need to know about. Third party payment processors are companies that act as intermediaries between your business and the banks that process credit card transactions. They enable you to accept credit card payments without having to set up a merchant account with a bank.
A third party payment processing agreement is a legal contract between your business and the payment processing company. It outlines the terms and conditions under which the payment processor will provide its services to you. This includes details such as fees, transaction limits, payment processing times, chargeback fees, and more.
When choosing a third party payment processor, it is important to carefully review the agreement to ensure that it meets your business needs. Here are some key things to look out for:
1. Fees: Third party payment processors charge fees for their services. These can include transaction fees, monthly fees, chargeback fees, and more. Make sure you understand all the fees associated with the agreement before signing up.
2. Transaction limits: Some payment processors may impose limits on the number of transactions you can process or the amount of money you can receive in a single transaction. Make sure the limits fit within your business needs.
3. Payment processing times: It is important to know how long it will take for payments to be processed and deposited into your account. Some payment processors may take longer than others, and this can impact your business cash flow.
4. Chargeback fees: Chargebacks occur when a customer disputes a charge on their credit card statement. If you receive a chargeback, the payment processor may charge you a fee. Make sure you understand the chargeback process and associated fees before signing up.
5. Security: Payment processors are responsible for handling sensitive customer information, such as credit card numbers. Make sure the payment processor has strong security measures in place to protect your customers` data.
In summary, a third party payment processing agreement is an important contract between your business and the payment processor. It outlines the terms and conditions under which the payment processor will provide its services to you. It is important to carefully review the agreement to ensure that it meets your business needs and protects your customers` data.