Fundamentals of Merchant Accounts

Merchant accounts are necessary for companies or individuals to conduct business and function in a manner similar to swipe accounts, which are what customers use to make payments using debit or credit cards. A business account provides an independent business the authority to accept payments from credit cards. This is a feature required by most businesses, more so ones based out of the internet since it adds to the credibility of the company and allows greater convenience to the customer in paying for his purchases leading to increased sales for the business. Retail merchant accounts have the highest popularity. The other different kinds of merchant accounts are Mobile and Wireless, Keyed, Business to Business.

A business that requires a retail business account is required to apply to a bank or a similar provider for the account. Subsequent to application, the business owner is evaluated in a manner similar to the evaluation process in a credit card application. Once Automated Merchant Onboarding approved, often within 24 hours, the business account is activated along with an application known as a virtual credit card terminal on a secure webpage. This facilitates the charging of a customer’s credit or debit card by an authorized business associate. Automated charging can also be activated, so that the assistance of a person is not required when making payments for any online purchase. It is essential that a minimum of 80% of all transaction for a business are conducted with credit cards.

After the securing of the merchant account, further equipment for card payment processing must be acquired. This includes equipment like a portable credit card terminal, printer, printer and terminal combinations, PIN number pad, and check reader. A business account also required processing software for credit card payments, which is generally purchased from established dealers such as LinkPoint or VeriSign. Once done, the merchant account will be equipped to accept payments via all the major credit cards – MasterCard, Discover, Diner’s Club, American Express and Visa.

Keyed business accounts are also known as Mail Order Telephone Orders (MOTO) and are accounts where the merchant is not equipped to swipe a customer’s business credit through a terminal. In this case, the business credit details are entered into a computer application or business credit terminals. Keyed business accounts also entail higher processing charges than retail business accounts because of the greater risk of security breaches, since the credit card is not actually present during the sale and it is not possible to verify the identity of the customer in all cases.

A Mobile and Wireless business account is applicable to businesses on the move, such as those at trade shows. This kind of an account is perfect for a start-up business or one that has no permanent address. With mobile accounts, it is possible to begin accounts where transactions are carried out through keying details into a mobile phone, known as Automated Response Unit Account (ARU). Smaller businesses that have low sales volumes are best served applying for such an account. In case of independent businesses or trade shows where the volume of sales is higher, a wireless credit card terminal is a good purchase.