What are merchant accounts?

Merchant accounts are helpful for merchants or business owners. Merchant accounts have become a necessity for online retailers.

The type of merchant account you set up will depend on your needs. For example, for an on site business such as a grocery store, you may require a Point of Sale credit card acceptance terminal. Mail in order business will have different requirements. Internet merchant accounts require a payment gateway on the business’s website.

For retail merchant accounts, the bank will process the card whenever it is swiped in the point of sale terminal. If the card passes their check, the money is deducted. Then the money is transferred into the business owner’s account in 2 to 3 days.

Merchant accounts allow for businesses to handle check and credit card processing for their customers. Two well known credit companies that can help you set up a merchant account are:

  • American Express
  • Discovery

You can even get wireless, portable terminals if your business requires one.

When choosing a merchant account provide you need to pick one that will accept different cards such as American Express, Visa, MasterCard, etc.

Internet merchant accounts are becoming increasing popular. They let you set up a payment gateway on your site to accept credit card payments. If you are not familiar with programming you should sign up with a merchant account provider that can help you set up a payment gateway on your site.

By getting a merchant account you can greatly increase your market share since a large percentage of consumers use credit cards to make purchases online.

Credit card approval gives your business website more legitimacy for online visitors. Some popular online merchant account providers are:

  • iKobo
  • Merchant Account Group

Many merchant account companies will first check the credit card processed for expiry or stolen. How the merchant account works is that the payment made first goes into the third party’s account which is the merchant account provider. Then they pay you into your account minus a fee for their service.

The fees charged are different depending on the merchant account provider. If you have a lot of small transactions from you site, you should look for a company that has a small per transaction fee. Also take into account any additional fees they charge. Some merchant account providers charge high fees for a chargeback if your customer decides to return the product and wants his money back.

The best merchant account to get will depend on your needs.

Do not be disheartened if you have poor credit. Many merchant account companies may still approve you even if you do not have the greatest credit history.