Why You Should Not

Let Your Bank Process Credit

Cards For Your Business

Visa and MasterCard are a group of banks, similar to an association. Almost every bank that issues a debit or credit card is a direct member of the Visa or MasterCard association.

American Express and Discover are individual companies that are separate and distinct in the credit card industry. They aren't a group of banks working together to find more ways to make a profit from lending their reserves - while the end goal is very similar to Visa and Mastercard.

American Express and Discover, as you probably already know, charge different rates than Visa or MasterCard - and it is simply because they are independent companies with a lot more control on their pricing and profitability than the Visa or MasterCard associations have. AmEx and Discover are some of the most expensive credit cards to process.

Discover is the smallest of the big four credit card issuers. American Express is next BUT an American Express cardholder typically has three times the net worth or credit limit than any Visa, MasterCard, or Discover card holder so it is extremely important to take American Express. An AmEx cardholder tends to spend more money at a time than any other card holder. MasterCard comes in a close second to Visa, the biggest credit card issuer in the world.

The relationship between Visa, MasterCard, and the banks that form these associations is very strict and regulated. They can not prove very competitive in the processing sector because of a law that says they can not be processors themselves because of the conflict of interest it would cause.

The chain of command when you accept credit cards through your bank looks like this:

Visa/MasterCard/AmEx/Discover -> Processor -> Bank -> You

There is a third level of charging, which is why it will cost you more to accept credit cards through your Bank than it would by going directly through a processor like MerchantCCP.com:

Visa/MasterCard/AmEx/Discover -> Processor -> You

You can save money by going directly to a processor, who is the closest that anybody can get to the credit card companies and associations.

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