The Ins and Outs of Merchant Accounts ECommerce Articles | May 14 Wholesale Golden Tate III Jersey , 2003 THE INS AND OUTS OF MERCHANT ... Robert Levings, ... ... accounts are ... in order to accept payments made by credit card from your ... whether you are operat
THE INS AND OUTS OF MERCHANT ACCOUNTS By Robert Levings, President, EasyPay123
Merchant accounts are necessary in order to accept payments made by credit card from your customers Wholesale Darius Slay Jr Jersey , whether you are operating a retail store or an online business. The following article answers the key questions that you may have regarding merchant accounts. It is part of a series of articles offered by EasyPay123 to help merchants understand the many facets of processing credit card payments.
1. Why Do I Need a Merchant Account?
Merchant accounts provide you with the ability to accept credit card payments from customers for goods and services. A merchant account establishes a relationship between your business, a bank and a credit card processor such that funds generated from credit card sales are deposited into your bank account on a regular basis, less merchant account fees (to be discussed later).
Without a merchant account, your customers will not be able to pay you using their credit card. Given that credit card payments are still the dominant form of payment on the Internet Wholesale Matthew Stafford Jersey , this would place you at a competitive disadvantage in a highly competitive business environment.
2. What Are the Different Types of Merchant Accounts?
There are two primary kinds of merchant accounts that are issued, depending upon your method of capturing the credit card information at the time a payment is made.
The first type of merchant account is called a ?card present?, ?signature-based? or ?retail? merchant account. This type of account is issued to merchants whose customers will be physically present at the time of payment. In such a case, you would be able to inspect the card and the signature on the reverse of the card Wholesale Ziggy Ansah Jersey , and would also be able to match the sales receipt signature against that on the back of the card. Typically, these types of payments are captured by using either a card imprinter (using credit card slips) or a ?card swipe? (Point of Sale) terminal.
The second type of merchant account is called a ?card not present?, ?non-signature-based?, or MOTO (Mail OrderTelephone Order) merchant account. This type of merchant account is issued to merchants whose customers are not physically present when they make a payment. This is typical of most Internet payments - where customers key their payment information into an online payment form - and phone-in payments - where operators key the payment information into some kind of payment application.
The types of merchant accounts will be a key factor in determining your fees Wholesale Austin Bryant Jersey , since banks typically view card not present payments as higher risk (i.e. a higher risk of fraud) than card present payments.
3. Where Can I Obtain a Merchant Account?
Merchant accounts are traditionally obtained through a bank that issues merchant accounts called an ?acquiring bank? or ?acquirer?. Generally, there is a separate group within the bank that processes merchant account applications.
When you apply for a merchant account, there is no guarantee that your application will be accepted. The merchant account risk group will assess a number of factors before approving your application, including (but not limited to):
? Your company andor personal credit history ? The type of productservice you are selling (note that it is extremely difficult to obtain merchant accounts in the U.S. for certain types of ?high risk? products and services such as online gambling Wholesale Will Harris Jersey , pornography, outbound telephone sales, prepaid phone cards, travel agencies and others. What is perceived as high risk varies by acquirer). Falsifying the nature of the product or service you are selling when applying for a merchant account could lead to termination of your merchant account. ? Estimated dollar volume ? Average order size
A good place to start is with your existing bank Wholesale Jahlani Tavai Jersey , since you already have a relationship with them. You may also choose to inquire about merchant accounts with other banks to compare rates and policies (in fact, we strongly recommend this). It is possible to have a merchant account with an acquiring bank that is different from the one where you have your bank account, although they may encourage you to move your bank account if you obtain a merchant account from them. It is likely that you will need to open a bank account with your acquiring bank so that funds can be deposited there. Some acquiring banks will route funds to a bank account of your choice (within the U.S.) if you request it, although there may be an additional fee for this service.
Note that American Express and Discover are their own acquiring banks Wholesale T.J. Hockenson Jersey , so if you want to accept either of these cards, you will typically complete a merchant account application directly with them.
Another option for obtaining merchant accounts is through a credit card broker or ?ISO? (Independent Sales Organization). These companies have relationships with many banks, and attempt to match your credit history and type of business with a bank that will accept your application. They are typically paid a commission from the acquiring bank for your business, and this is passed on to you in the form of a set-up fee or a percentage of sale fee. There are many ISO?s to choose from. Be aware that not all of them are reputable Cheap Da'Shawn Hand Jersey , so you would be well-advised to do some research on them before ?signing on the dotted line?.
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