CREDIT CARD MERCHANT ACCOUNTS

To accept payments made by credit cards, you need to be associated with a service provider who provides merchant account services so that the credit-card transactions can be processed. The merchant account service provider should offer processing solutions with incentives, service, rates and features that meet the requirements of your business type. To begin with, it is good to know about the various kinds of merchant accounts. By understanding the various merchant account available and the features associated with them, you will be able to choose the right credit-card processing solution that is best suited for your business.

Basically, there are two types of merchant accounts. They are as follows –

-       Card not present merchant account

-       Card present merchant account

Higher fees and rate will be charged for merchants whose businesses fall under the high risk category. Hence, this implies that rates are lesser for card present merchant accounts when compared to card not present transactions.

Card-present merchant account – The card-present transactions require the card as well as the consumer to be present physically at the point of sale. Here, the card is swiped at the terminal and the magnetic-strip reader captures the credit card information electronically. Therefore, card present merchant account holder need to invest in hardware which enables the electronic information capture process.

Card present accounts are further sub-divided into 2 types, on the basis of the processing solution selected –

- Portable solution for processing

- Non-portable solution for processing

Non-portable processing solutions are usually preferred for retail stores. The hardware required for processing credit cards will be connected to either modems or phone lines. When the credit card is swiped through this hardware, the information will be captured and authorization is achieved in real time. With portable processing solutions you may sometimes not achieve real-time authorization. For instance, with wireless merchant accounts, you can enjoy real-time authorisation using a magnetic card-reader. But, this involves higher monthly rates and hardware costs.

Portable processing solutions are also offered by store-and-forward merchant accounts. Here, the credit card information is stored at the point of sale. The trader can send across these transaction specifications to be processed later when the phone-line is available. This type of merchant account is best suited for businesses that have large volume of sales and small ticket sales.

Card not present merchant accounts – the MOTO merchant account is the cheapest among all the card not present merchant accounts. All that will be required is the hardware for manually keying in the consumer’s credit card information. The software required for processing credit cards is generally affordable and also comes with many security features which are vital for an e-commerce business. The latest available card not present merchant accounts are referred to as telephone merchant accounts. This is simple to use and the only pre-requisite is a telephone or a mobile. All businesses are unique and hence it is essential to recognise the requirements of your business. Finally, choose an account that is right for your business type.