How credit cards used to work
In the early days of credit cards, credit card acceptance was a long and tedious process.
Not so long ago, businesses would document a customer’s credit card details by pressing the card into 3 pages of copy paper with something called an imprinter. They would call in to an authorization center, read off the card details and wait for an authorization number. One copy of the card imprint was given to the customer as a receipt of payment. At the close of business, the store owner or staff would take another copy of the card imprint to the bank as part of their daily deposit. The business would have to wait for the money to transfer from bank to bank, before finally being deposited in their account 5-7 business days later. The third imprint copy was saved as part of the sales record in case there was any type of dispute or refund request. Understandably, many businesses were reluctant to accept cards.
How credit card processing works today
Today, credit card acceptance is now almost a requirement for most companies, and small and medium-sized businesses (SMBs) have many ways to process credit card payments. Businesses might still swipe a card or enter in a card number, but it’s usually done via an electronic card reader, also called a payment terminal. The payment terminal does much of the documentation, fraud protection, and processing for the business, and it all happens online. Businesses today often accept payments online and in person, and can choose from a range of options that provide lower credit card processing fees and make payments easier for customers.