Card Processor: Meaning in a Merchant Cash Advance
A card processor is the company that handles a business's credit and debit card payments, moving the money from the customer's card network to the business's bank account. Square, Stripe, Clover and many bank-owned processors fill this role.
What does card processor mean?
When a customer taps a card, the processor sends the charge to the card network, collects the money and deposits it into your account, minus its fees, usually the next business day. Your processor keeps a record of every sale, refund and chargeback, and sends a monthly processing statement that summarizes them.
Why does card processor matter to your business?
For card-heavy businesses, the processor is the main source of deposits a funder reads. Some merchant cash advances are repaid through the processor itself, which holds back a percentage of each settlement before depositing the rest. That arrangement, called split processing, ties the advance to your processor, so switching processors during the advance usually needs the funder's consent.
What should you ask before switching processors?
- Does my advance collect through the processor or by ACH from my bank?
- Does the contract restrict changing processors?
- Will the new processor's deposits land in the same account?
What is a processor advance?
Some processors offer their own advances, repaid automatically from card sales. They count as a position when another funder reviews your file, just like any other advance.
Can you use several processors at once?
Some businesses run an online store through one processor and a counter terminal through another. Tell your funder about each one, since a split processing advance usually needs every card sale to run through the processor it names.
Where will you see it?
On bank statements, as daily deposits in the processor's name. On processing statements. In a merchant agreement that names the processor or requires you to keep it.
Which terms are related to card processor?
The full list is in the glossary. Owners ask about this in Do cash deposits count toward an MCA?.
A term on your offer you don't recognize?
Send us the line and we'll tell you what it means. Call 877-FUND-654 with any question. We call you back, usually the same business day, and we always talk with you before we shop your file.