What You Need To Know About the Evolution of Merchant Services
Merchant services is a modern solution to cashless payment. Over the years, this method in business has grown to include not only big businesses but the small to medium enterprises, making transactions easier for both the consumer and the merchant. Without this system, businesses are burdened by the tedious process of accounting for the money. It is also a big benefit to consumers from the risk of purchasing in cash.
Merchant services is a term for the financial process of cashless payment. This involves the step-by-step progression of the transaction from the time the client swipes or inserts their card on the POS, to the time the merchant receives it. There is a complex process in between these two events, and merchant services bridges that.
Of course, this method wasn’t developed overnight. Over the years, merchant service has advanced, and here we review the history of how it came to be.
Invention of the Credit Card
The first credit card issued by American Express in the 1950’s was made out of plastic, and was an answer to the needs of the business people who had to travel regularly. The reason is straightforward—these men didn’t want to bring huge amounts of money along their journey. This card for the traveling businessman wouldn’t be upgraded to the credit card we know now for few decades after.
The Early Processing System
The first developed credit card processing system only involved three parties: the client, the merchant and the issuing body (Visa/American Express, etc.). This is quite simplistic as compared to the modern system of processing cards. This was a system made easier for the business owner, but very impractical when it comes to processing a bulk of transactions.
Early credit card processing was both time-consuming and manually-made. Also, merchants need to wait days or some weeks to receive the funding.
Manual Imprinting With A Credit Card Terminal
The manual processing of credit cards was done by a clerk. This person had to capture the card physically. The imprints with the details of the card was made on carbon paper, and had to reprinted to ensure that all parties have a copy. This was compiled and after a week sent to the bank for fund processing.
The Turnaround Of 1979
A lot of improvements happened in 1979, namely the invention of the first POS terminals. Visa released the Point-of-Sale system that greatly solved the time-consuming issue of manual processing. Also, MasterCard was established, and will later on become one of the major worldwide credit card entities.
The magnetic strip found at the back of credit cards that contain data was first established this year as well. It made information readily accessible, making the process way easier than its early counterparts.
Merchant Account Is Made
Third-party processing companies started existing one by one. This also paved way for merchant services to exist. These companies act as the bridge between all the parties involved, making the process really easy and less worrisome for the merchant. Merchant service providers enable business to grow and is a big aid for any enterprise’s financial transactions.
Merchant services offered by GB Payments are modern solutions to any needs you may have in terms of financial transactions. They offer excellent credit card processing that is efficient, safe and secure every single time. Request for a call back today in our website!