Study: My Understanding of Services

Did You Know About the Various Merchant Accounts to Choose From?

A merchant account is a platform that facilitates the processing of payments to business people via debit cards, credit cards, gift cards, and checks. It requires routine settlement with an entrepreneur’s bank along with payment processors like VISA or MasterCard. The type of merchant account perfect for a business depends on its industry and model.

There are two basic types of merchant accounts; card present, and card not present. A card present account requires a card to be swiped during a transaction with a customer. Its risks are limited because all transactions bear customer signatures as their sign of approval. These types of accounts are perfect for physical retail outlets and they attract low fees and rates.

Card present types can be further categorized to meet specific needs. E.g. a wireless merchant processing account which requires a portable credit card machine. Their concept is similar to that of regular accounts and they are good options for enterprises which handle transactions during field operations, like home repairs.

A store and forward account is the type which allows credit card details to be stored, but not processed into a handheld machine. It is favorable for businesses on the go and do not need credit card acceptance, and experience reduced ticket value and credit card declines.

There are other types of card present accounts designed for particular businesses. For example, grocery merchant service accounts for enterprises that sell consumer goods that perish quick and do not deal with gasoline. A lodging account for businesses within units where customers sleep over. Restaurant merchant accounts which are capable of making changes to customer transactions to exclude certain percentages after a credit card has been authorized.

A card not present account does not require a card for a transaction to happen. It is mostly used for internet-based businesses, telephone sales, and mail order businesses. They are high-risk types because you cannot prove that a cardholder was present during a transaction and therefore attract high fees. They are categorized differently as well.

Internet accounts are used by e-commerce businesses to process orders in real time over the Internet. A transaction is made via an electronic gateway which approves or declines a credit card rapidly.

Mail order accounts transactions usually prompt a customer to provide their credit card details on a card that is then sent to the entrepreneur for processing. Merchants are responsible for keying in the credit card information and running them for approval, after which they deliver orders if the cards are okay.

A touch-tone telephone account usually prompts a customer or vendor to enter credit card information over a touch-tone phone. This type requires no credit card equipment. The authorization numbers are issued verbally, hence they should be written down on a customer’s receipt. It is considered risky and attracts high fees.

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