What Exactly is a Merchant Account?
A merchant account is defined as a account opened by small business that allows them to accept credit and debit card payments from brands of their choice. Merchant accounts can be applied for through certain banks, credit card companies, and payment processing companies. Depending upon your business needs and credit card transaction potential you will need to select a merchant account that works best for you. Below are three main accounts that you can choose from.
Retail Merchant Accounts
A retail merchant account is a basic account for small businesses. When considering costs of transaction fees, the retail merchant accounts are likely the least burden on your wallet. However, there are a lot of rules that come with this type of account. Retail merchant accounts require high volumes of credit card sales each day with the card physically present for swiping through the credit card terminal found in stores. These types of accounts are generally obtained by restaurants, grocery stores, and some smaller hotel chains. This is ideal for companies who have no intentions of conducting business through mail or online as the actual card and swiping on the card terminal are required for this form of account.
MOTO Merchant Accounts
Mail order or telephone orders can also be processed through credit or debit card. You will need to open a MOTO merchant account. They generally charge more for transaction rates and are to be used when you cannot physically swipe the credit card. Payments are processed when the merchant enters the credit card information into a terminal that is installed on a computer or inside of a web browser that is connected to the payment service providers website. These are ideal for companies selling products via television, mail, or by phone.
Internet Merchant Accounts
Very similar to the MOTO merchant accounts internet merchant accounts are great for businesses to try. However, the difference is that they can only be used for internet transactions. Merchants who obtain these accounts will utilize a virtual terminal or payment gateway service that will process the credit cards for them. You can easily find internet merchant accounts included in web hosting packages. When customers use your customized shopping cart to checkout, the funds are processed online and transferred to your account.
In this plastic world we live in today it is extremely important to do research for processing payments through your business. You really need to make sure that you have taken the time to conduct the research to find the right type of merchant account and payment processor for the type of business you plan to run. A good rule of thumb is to read through the payment service providers terms of service so that you can see all of the fine print. You dont want to end up paying large amount of money on processing fees, nor do you want to be held back by the restrictions or rules that might be in place. If while you’re researching a service provider you can’t seem to find what you’re looking for, dont be afraid to ask questions.