What Is a Credit Card Processing Agent?

Rounding it up

• Payment processing agents are independent sales representatives for payments companies, multiple payments companies and SaaS (software-as-a-service) solutions.
• Selecting the right DPA can mean the difference between a successful venture and one that runs you in the red.
• Ensuring your processor fits with your business is key; that’s what Swipesum specializes in.

Have you ever used a travel agent? Perhaps you’re planning that dream vacation to a remote island and you just can’t seem to navigate booking all of your excursions. Call it not speaking the language or having too many moving parts, but you call on the services of a travel agent. Or, perhaps you’re visiting that super exotic city you’ve always wanted to check out. You don’t speak the language, let alone read it, and you can’t figure out if they do or do not have public transit of any kind. Uber? No idea. You get on the horn with the hotel concierge who can help you navigate the uncertainty, right?

You’re a business owner and you want to ensure your customers can pay for your goods and services however they want. Importantly, you need to be focused on getting the best solution out of the more than 5,000 different options in North America, at the best price.  One of the best ways to ensure both of those things come true is by using the best payment processor for you, but you don’t have the time or know-how to shop around the various processors, do you? No, and just like a travel agent or hotel concierge, merchant services agents can help you navigate these often confusing waters. Here, we’ll look at exactly what a digital payment agent is, why your business needs one and some of the things they can do to help you succeed.

So what is a digital payment agent (DPA)?

Digital payment agents are people who work with merchants of all sizes - but mostly small and medium-sized businesses - to help facilitate payment processing. A DPA  works for and with various payment processors which are part of an independent sales organization, or ISO. They are, essentially, experts on all things payments. It’s their job to understand how the payment system works, the various players involved and can help business owners find the best processor for the type and size of business they’re running. In essence, DPAs are payment subject matter experts. Swipesum isn’t an agent, but merchants can get all of the positive characteristics of working with one (multiple providers and industry expertise), without the negatives (overpriced services, opaque business models, no customer service. With our access to the payment system and hundreds of different processors, Swipesum is well-placed to take care of all of the heavy lifting for you. Throw in our proprietary software that helps keep your payments on track and you’ve got a great company in your corner.

Wait…how do payment processes work anyway?

Great question and it can be a little bit complicated. There are three major steps in processing a payment: Authorization, settlement and funding.

The first step, authorization, is all about ensuring that the customer standing at the till has the spending power to purchase the services or goods they’ve got on the counter. The customer will swipe, insert or tap their card, sending a message to the merchant’s payment processor that says, “Hey, Rick wants to buy a candy bar for $2.99. Is that cool?” The processor sends that same message through the payment card network (think Mastercard or Visa) to the issuing bank. The issuing bank then says, “Yeah, no problem” or “Whoa…no way on Rick’s candy bar,” and sends a note back to the merchant’s card terminal with that message.

Assuming Rick gets his candy bar, most of the work now happens completely behind the scenes. The next step is settlement. At the end of the business day (usually) the merchant will send a batch of all of the payment information to their payment processor who will again work with the card network to get money from the various customers’ banks. The issuing banks then send the appropriate cash to the merchant’s bank, via the payment processor and card networks, minus fees. 

The final step is the funding part, which is simply moving the money from the bank to the merchant, a process that can take a business day or two.

So…that payment processor is involved a lot!

Yes indeed and that’s why it's so important to select and work with one that fits your business. There are a few key reasons this is important:

Fragmented

The credit card and payment processing industry is fragmented and a bit all over the place. That means that many processors are highly specialized. This is both good and bad. On the good end of the scale, you can work with a processor that really understands your business. Let’s face it, if you’re running a restaurant, your needs are not the same as the person running a sporting goods store. On the bad end, however, the nature of the industry can make it incredibly difficult to find that correct agent.

Business size

Let’s say you own a business that manufactures and sells specific widgets that go in high end machinery. You do quite a bit of your business online with some fairly large companies with large, complicated accounts receivable departments. There’s lots of paperwork and invoicing and purchasing cards and other whatnots. Your needs are going to be completely different than an older couple, living in a small town, operating a five and dime. You need a payment processor that fits your business size too.

Experience

Simply Google “become a payment processor” and you’ll find fairly quickly that there are hundreds or thousands of articles detailing ways that anyone can become an agent right from their own home. We’re all for the pull up your own bootstraps entrepreneurs but if you’re a business, you likely want to work with a tried and true payment processor. 

Getting a handle on these three elements can be an undertaking which is why…

Swipesum is here

We know payments and we take the time to understand exactly your needs. Your ability to make money in your business is tied to lots of things, but in a large way, it’s tied to how quickly and efficiently your customers can pay you and you can get paid. At Swipesum, we partner with our business customers to help find the best payment processor that checks all of the boxes above. Book your free consultation today!