4. What is real time processing and electronic terminals? How about software?

Online software and digital terminals are used to transmit information to the credit card processor in regards to a credit card transaction. Each type of processing method is used for each different business type. An example for an online business would be that it needs software to process the transactions as it would process the payment directly over the internet. A terminal would be used for a retail business as the personw ould need to swipe their card to process the transaction.

Here are some examples listed below.
 

Retail - Retail merchants sell goods that are tangible that you can see in a physical environment face to face. This can be anything from electronic equipment to clothing or even vehicles. Merchants who are able to swipe to process credit card transactions will recieve the lowest discount rate.  

Service - If you sell services like auto repair or even plumbing you can use either a digital terminal to process transactions or software. If 50% or more of the transactions are face to face then you may want to stick with the digital terminal option. If more of your transactions are keyed then the software solution is probably the best solution.  

Mail/Telephone order - If you process credit card transactions over the phone or accept mail orders then you will use software to process your transactions. There are many benefits to using software over using a digital terminal which includes the ability to accept checks and process recurring transactions. You can also process large quantities as well as do address verification quite easily.  

Internet web store - If you have an e-business chances are you already know you will need to use softwae to process transactions. Web based bussinesses pay a higher discount rate then retail businesses as it is easier to prove in person who owns the credit card then on the internet. The advantage of processing credit cards online is that it is faster then retail merchants.