Various types of Merchant Accounts

Nowadays, most business people or firms are dependant on plastic money rather than cash. If you are running a business, it’s very important for you to make use of the service of payment gateway.  Depending on the kind of business you are running, a merchant account is needed to accept the credit cards, either physically or electronically. Merchant account is nothing but a kind of bank account which allows you to accept credit cards either physically or electronically.

There are mainly four types of merchant account. The main differences between these merchant accounts are the differences in their transaction fee structure and the rules associated with the use of merchant account. It is quiet natural for the merchants to have different kinds of merchant accounts for the same business. Let us check the different types of merchant accounts.

1) Retail merchant account – Retail merchant account or traditional merchant accounts are the most common type of merchant account. Retail merchant accounts posses the least volume of restrictions when compared to other types of merchant account. The businesses which mainly depend on retail merchant account are groceries, hotels, departmental stores etc. Retail merchant account uses a physical credit card terminal to process the credit card payments. For example, most of us have seen a swipe card terminal in grocery or retail shop.

2) Mail or Telephone Order (MOTO) – This type of merchant account possess high transaction charges or fee when compared to the retail merchant account. These types of merchant accounts are used when we cannot process the credit cards physically. These were mainly introduced to satisfy the credit card processing requirements of mail order companies who run their business based on orders through phone or mail. Moto account usually process credit card payments by entering the details of the credit card manually using a keypad and software installed on the pc or with the use of a virtual terminal.

3) Internet merchant account – Today, internet has become a global market for the businesses. So, for an online business to flourish, the need of a virtual payment gateway is very important. Internet merchant account fulfils the needs for a virtual payment processor. This type of merchant account is very similar to MOTO merchant account when comparing the fee structure and discount rates. Here, all types of transaction are done electronically. The main attractive factor in this type merchant account is the convenience of customers. They can buy the products online without visiting the shops physically. It also helps the customer to save his precious time.

  4) Mobile/Wireless merchant account - This type of merchant account is designed especially for the business men who travel constantly and need the payment to be processed on the spot. This kind of merchant account posses higher discount rates and a low fee structure.

If you are running a business with different service platforms, you can use any or all of the above mentioned merchant accounts according to the nature of your business. The major differences between these merchant accounts are the differences in their discount rates and monthly fee structure.