Merchant Account – What is It?

A merchant account is essentially a type of bank account that enables you (the merchant) to accept and process credit card and debit card payments. They are usually provided by banks, credit card companies, Independent Sales Organizations (ISOs), and other merchant service providers. Egopay is an example of a company that provides reliable merchant accounts to customers.

Types of merchant accounts

Currently, they are as wide-ranging as the merchants themselves and the types of businesses they undertake. A majority of these accounts are differentiated by the type of transaction fees involved, rules for using the account, perceived risk of the account, the method used to sell the items being sold, and who is available at the point of the transaction.

Here are some types of merchant accounts: e tuna rakyat

Retail
MOTO (Mail or Telephone order)
Internet-based (e-commerce/website order processing)
Mobile or wireless
Multiple
High risk
Importance of an online
If you want to obtain payments through credit cards and debit cards, then it’s important you set up a merchant account. With an internet merchant account, you’ll be able to carry out web-initiated transactions in real time and increase the ROI (Return on investment) of your business. It is the most cost effective method of receiving online payments from your customers.

Regardless of the sector you are in -retail or wholesaling-a merchant account will assist you conveniently process online payments. Currently, most people are using credit cards for making online purchases. Therefore, you’ll miss out greatly if you can’t take advantage of the benefits of merchant accounts.

How does it work?

An internet merchant account is the same as any other bank account. The only difference is that it is specially meant for processing credit card transactions for a merchant. It will require numerous steps for the cash paid from your customers’ credit card to get into your merchant account.

The initial step is approving the payment and adding the credit card details of the customer on your site. Thereafter, the credit card has to be verified and approved to confirm its authenticity. If it has been stolen or has expired, it will not be accepted by the system. You may get this service from your merchant account provider or you may opt for an online authorization company (payment gateway). You should be careful when choosing authorization services because accepting invalid credit card transactions could be expensive to your business.

When the thorough security checks have been successful, your merchant account provider (or authorization company) then submits the information to their credit card processor who takes the cash from the customer’s credit card and channels it to your merchant account. This entire process usually takes about 24 to 48 hours to be complete.

As much as some merchant account providers give a full package in which they take care of your merchant account as well as the processing of the payments made by credit cards, you may choose to have different companies sort out every part. For instance, one company can offer the authorization service while you choose to go for a merchant account yourself with your preferred financial institution.

Requirements for getting a merchant account

To get approved for a merchant account, you’ll have to meet certain minimum conditions. Most account providers will require you to have proof of your business, an authentic business checking account, and reliable credit history. Due to the risks involved, a majority of merchant account providers will take you through a thorough verification procedure and a lot of paperwork concerning your business before your account gets approved. If you want special account requirements, then you should be ready to pay more fees to your account provider.

Merchant rules

For any relationship to flourish, each side must be ready to live up to its roles and obligations. To ensure you reap the maximize benefits of your account, all providers usually craft rules that outline their boundaries of operation. After your account has been approved, you’ll have to oblige by the set rules. If you fail to do so, you may be reported to the credit card company and your account could be disapproved.

Rates & fees

You will incur a variety of charges for operating a merchant account. The amount you will be charged for processing transactions and other associated fees varies from one merchant account provider to the other. Some of the fees are deducted periodically while others are deducted on a per-item or percentage basis. Some of the rates are determined by the merchant account providers. Most of the charges are passed through the merchant account provider to the company issuing the credit card (called interchange fees), and they usually vary based on the type of card and the conditions of the transaction.

How to choose a merchant account

You can make a big mistake if you simply choose a merchant account provider without doing enough homework to ascertain its commitment and reliability. You should ensure you collect as much facts as possible so that you can make a solid, well-educated decision before applying for a merchant account.

Here are some factors to put into consideration:

Look for a merchant account provider with proven track record. Show you back for one with numerous complaints and below average customer feedbacks.

Check out if they offer superior customer support. You need a provider with supportive and friendly customer service.

How are their fees? Ensure they are reasonable and competitive according to the industry standards. However, fees that are too low may be suspicious.

Do their terms and conditions resonate well with your needs and personality? A merchant account provider with abnormal conditions is not worth your time.

Robust internet based features. A provider with strong and reliable online based features is essential in the current digital world.

Leave a Reply

Your email address will not be published. Required fields are marked *