Factoring

Factoring

WebDynamic™ Web Glossary

The purchase of debts owed, or "accounts receivable", in exchange for immediate payment at a discount. In eCommerce, the term is often applied to ISOs that offer to process credit card transactions through their own merchant account rather than through an account established by the merchant, in exchange for a percentage of the transaction or other fee. Factoring of credit card debt is illegal.

The benefits of Factoring are increase purchasing power, improve credit rating and increase production and sales.