As the world of business continues to grow and develop, the need for a card processing system that can handle all your needs becomes increasingly important, and choosing the right option here is crucial for ensuring the success of your business.
A card processor limitation is something that will affect how much money you make from each transaction, so it’s essential that you understand what this means before you start using any type of credit card processing system.
In many cases, the card processor limitation is one of those things that you may not think about until it’s too late; if you are in the process of developing a new business or expanding an existing one, then you should be aware of this critical factor, and we have put together all that you need to know about this consideration.
What Is A Card Processor Limitation?
A card processor limitation refers to limits and restrictions that are placed on the credit processing capabilities of a business by the credit card processor, and these are largely used to minimize chargeback liability, and reduce or prevent instances of fraud.
The most common types of limitations include:
Maximum Number of Transactions A Merchant Can Accept
One of the most common types of card processor limitation is a limit on the number of transactions that a merchant can accept within a predetermined period of time.
This is often referred to as a “maximum number of transactions per day”, and can vary from provider to provider.
This is because there is a risk involved with accepting more than this amount of transactions, which could lead to fraudulent activity being carried out against your account.
If you exceed this number of transactions, then you run the risk of having your account closed down, and losing access to your funds.
This is why it’s important to choose a card processing service that offers a high level of security, and has a good reputation for providing reliable services.
Limit On The Amount of Individual Transactions
Another common type of card processor limitation is the maximum amount of payment that can be received in an individual transaction.
This is usually expressed in terms of dollars, but can also be expressed in other currencies such as Euros or Pounds Sterling.
For example, some providers will allow merchants to receive up to $10,000 in a single transaction, while others will only allow them to accept payments of up to $1,500.
This limitation is typically put in place to protect businesses from receiving large amounts of cash at once – this can be a problem for small businesses that lack the resources available to store large sums of money securely and can increase the risk of offenses such as money laundering or theft.
If you want to avoid this issue, then you should look into a card processing solution that allows you to set your own limits on the amount of money that you can receive in a single transaction.
Limits On How Many Cards You Can Process Per Hour
Some card processors will impose limits on the number of cards that you can process in a given hour, or within 24 hours, and these limits are designed to ensure that they do not overburden their systems and that they can provide a fast and efficient service for their clients.
If you are planning to take a lot of payments in a single day, or a short period of time, it is best to find a processor who does not impose this limit.
Limit To Transaction Amounts From A Limited, Approved List
This is a more unusual limitation, but one that restricts overall payments and transaction amounts for the online store.
For example, if you are selling products through an eCommerce platform, then you may need to make sure that you are able to sell certain items at your preferred prices without running into any issues.
You can check whether your chosen card processor imposes this kind of restriction by checking their website.
Why Do Card Processors Use Limitations?
There are several reasons why card processors use limitations when processing credit cards, and these include:
Protecting Themselves From Fraud
This is usually the most common reason that a card processor will limit transactions and plays a key role in fraud prevention.
By limiting the number of transactions that a merchant can carry out, they reduce the chances of fraud occurring, and therefore reduce the risks associated with accepting credit cards.
Enabling Merchants To Receive Payments Faster
A second reason why card processors use limitations is to enable merchants to receive payments faster.
This is especially useful for those who are new to using credit cards and are unsure how to manage the process.
By setting limits on the number of transactions that can be carried out in a given timeframe, they can help merchants to get started without having to worry about getting overwhelmed by the task.
Preventing Overloading Their Systems
A third reason why card processors use restrictions is to prevent their systems from becoming overloaded.
If a system becomes too busy, then it could cause delays in processing payments, which would result in lost sales.
How To Choose The Best Card Processor
Choosing the right card processor is important because they have a big impact on your business.
It’s easy to choose a card processor that offers great features, but it’s also crucial to consider other factors such as security, reliability, and customer support before making a final decision.
You must choose a card processor that has strong security measures in place.
These should include things like encryption technology, secure payment gateways, and advanced fraud protection tools.
It is also vital that you choose a reliable card processor.
They should offer 24/7 customer support so that you can contact them whenever you need to.
Finally, you should choose a card processor that provides excellent customer support.
You should be able to reach someone via phone, email, or live chat, and they should respond quickly and efficiently.
Frequently Asked Questions
How Do I Know If My Card Processor Uses Limitations?
Most card processors impose some form of limitation on their services.
However, some may allow you to set your own limits. Check their websites to find out more information.
What Are The Benefits of Using A Card Processor That Imposes Limitations?
There are many benefits to using a card processor that sets transaction limits.
For example, they can help to protect against fraud, ensure that your customers pay promptly, and give you peace of mind when carrying out large-scale purchases.
Card processor limitations can feel frustrating, but there are valid reasons for their inception.
Choosing the best card processor for your needs is something that requires careful consideration, and choosing the wrong one could cost you money and time.
Lean all you need to know about payment processing over in our merchant directory.