Merchant Accounts - Credit Card ProcessingBy Verkha of Moneyvally.com
Internet shoppers naturally favor business websites that accept all payments,
hence the increasing need for easy to operate, low-cost merchant accounts. On their part, merchant
account providers are constantly re-inventing themselves to provide complete security for processing.
A merchant account is essentially a contract or an arrangement between a bank and a merchant, or a
merchant account provider and a merchant.
The merchant wishes to accept payments for his
services/merchandise through card transactions of a particular brand. The acquiring
bank extends credit to the merchant, processes the customer's information and
approves the transaction.
In addition to such direct dealing, merchant accounts may also
operate through intermediaries, called service providers. In this instance, the intermediary,
for example Paypal, provides payment services to its clients, who have merchant accounts with them.
Paypal, in turn, has a merchant account with a bank. The payment takes place through a payment gateway.
A payment gateway is simply a place where you pay, like the cash counter in a retail unit. Only here it is virtual. The difference, though, is that each
shop might have its own cash counter, but in this system, several virtual shops (e-commerce sites) use
the same payment gateway whose sole purpose is to channel the details of the customer's credit card.
Merchant account providers log in and key in numbers (which are encrypted). Alternatively,
the payment gateway, may be linked to the shopping cart on the merchant account provider's site. Either
way, this part of the online payment processing hardly takes a minute.
The customer places an order along with information, the information is forwarded to
the payment gateway, which further sends it to the merchant's acquiring bank. The bank sends the
information to the card association, which in turn sends it to the issuing bank of the card, which
checks that balance available with the customer. The issuing bank then approves or rejects the transaction, providing a reason for rejection.
Several merchant account providers offer free terminals and internet payment gateways
and free payment gateway software when you open merchant accounts with them.
There are others that
allow free merchant accounts with low transaction fees. The transaction fee and the discount rate
(both together make up the total processing fee charged by the account service provider) are lower
for terminal swipes. Then there are discount merchant accounts that charge a very low
fee for the bouquet of options you provide to your customers.
Merchant Accounts - Credit Card Processing Recommended by Verkha, Click Here Now
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