Why Do I Have to Pay for Credit Card Processing?

While there is little doubt that accepting credit cards can boost sales, many small businesses still refuse to accept them. The most common reason most merchants give for refusing to take credit cards is the fees. 

How Credit Card Processing WorksIn order to understand why processing credit card transactions cost money, it is important to understand how the actual process works. There are actually four parties involved in the entire process. The money involved in the transaction is loaned to the customer by the bank issuing the credit card. The customer will either pay off that loan within 30 days or will add the amount to a balance and then pay interest on the total balance. In addition, the merchant receives a loan from the acquiring bank. Both the acquiring and the issuing banks deduct fees. This means that the amount that finally makes its way into the merchant's account is less than the amount paid by the customer. 

The fee charged by the issuing bank is referred to as the…