What Is Business Credit Card Processing?

Business credit card processing is a multi-step business process that requires cooperation between the business and the credit card processing firm. Credit cards are a form of payment that allows the user to delay payment, based on the amount of credit extended by the financial institution or retail store. Businesses that allow customers to pay by credit card can increase their customer base and expand their services to the Internet.

When credit cards were first introduced, they were an extension of store credit. The credit card was first introduced in the United States in the 1920s to sell gasoline, with the card limited to a specific gas company. Large retail companies initially offered their own credit cards to customers to increase their market share and provide a benefit to their customers. In 1950, the Diners Club® card was invented, allowing customers to use a general purpose card that would be accepted at multiple suppliers.

It is worth noting that credit card acceptance is quite widespread in the United States, England, and Canada, but has a much lower acceptance rate in other countries. This is a combination of culture and banking practices. For example, Japan remains a cash driven society, with a significantly lower rate of credit card usage than other comparable nations. The level of acceptance of credit cards as a payment method has a definite economic impact, as consumers are limited to spending the cash on hand and not making purchases based on future income expectations.

In order to accept a credit card, the merchant must first subscribe to a business credit card processing firm or network. There are a range of networks available, with Visa® and Mastercard® being the most widely recognized. The merchant is issued a specific merchant identification number and is provided with a business credit card processing account and the equipment required to swipe the credit cards magnetic strip as part of the payment process. The merchant typically pays for this service based on usage, with service fees based on a percentage of sales processed via the credit card network.

At the point of sale, the cashier enters the sales information into the cash register, arriving at the total cost of the sale. The customer provides his or her credit card as the form of payment. The cashier swipes the card, and the card number, total amount, and merchant identification number are submitted to the business credit card processing firm. The service submits the information to the credit card holding company, which then checks the available balance on the credit card and either approves or denies the transaction. If the transaction is approved, an authorization number is sent back electronically to the merchant. The customer signs the receipt and the sale is finished.

In order to receive the actual cash for these transactions, the merchant is required to submit a summary of the day’s transactions in a batch to the credit card processing firm. The credit card processing firm then provides a credit in the merchant's bank account for the total amount of sales, less the processing fees. There is usually a two- to three-day delay between the processing of the transaction and the receipt of the credit in the company’s bank account. 

What Is an American Share?

An American share is a share of stock issued by a company that is based outside the United States, but issued to an American investor through the auspices of a transfer agent representing that foreign company. This arrangement for purchasing securities certificates issued by non-US companies must be conducted in accordance with regulations put in place by the Securities and Exchange Commission, or SEC. The certificates themselves serve as proof of the investor’s claim on the foreign equities and make it possible for investors who are US citizens to enjoy the benefits of owing shares in companies based around the world.

The process of purchasing American share investments requires working through a transfer agent. The agent will have authority from the issuer of the stock to sell shares to international investors, with the provision that the agent comply with any trade regulations that may apply. In the case of the American share, this means the agent must be aware of and willing to comply with the current trade regulations put in place by the SEC in the United States. Compliance with the regulations not only protects the interests of the investor who is making the purchase but also protects the transfer agent in the event of a default on the purchase. The protection afforded to the agent in turn helps to indirectly protect the interests of the issue of the stocks, ensuring the foreign company does not incur any type of inconvenience or loss as the result of the domestic investor from following through on the deal.

For US investors, the American share presents the opportunity to participate in investments that would be difficult if not impossible to secure otherwise. With trade laws varying from nation to nation, the ability to legally make direct deals with issuers may or may not exist. When this is the case, obtaining securities certificates in this manner makes it possible to comply with laws in both nations involved while also making sure that both parties are legally protected in their respective roles as buyer and seller.

Many investors in the United States utilize this American share model as a way to include international investments in their portfolios. Doing so can be a very lucrative arrangement, allowing investors to acquire interests in companies that in some cases have been in business for centuries. As with any type of investment activity, there is some degree of risk with this approach. For this reason, investors should research offers carefully before beginning to work with a transfer agent to acquire the desired securities.