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A merchant account is an
account with a merchant bank that makes it
possible for businesses to accept credit card
and debit card payments online.
And although
merchant accounts are offered through local
banks, a merchant account is not the same as a
checking or savings account.
Instead, a merchant account is like an agreement
and a contract between the merchant account bank
and the business owner which allows you to
accept credit card payments online for small
transaction fee, along with rules and
regulations as well.
Types of merchant accounts:
There are basically two types of
merchant accounts: |
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The “over-the-counter”
(OTC) merchant account and the
“money-order/telephone-order" (MOTO) merchant
account.
The “over-the-counter” merchant account is used
primarily for retail merchants with brick and
mortar storefronts and typically has a lower
discount rate and transaction fee since the
customer and the credit card are physically
present at the point of sale which reduces the
risk of fraud.
The “money-order/telephone-order" or MOTO type
merchant account is primarily used for Internet
and home-based businesses where the customer and
credit card are not physically present at the
time of sale which increases the risk of fraud
and as a result can also increase the discount
rate and transaction fee as well.
How a merchant account works
After your customer enters in their credit card
information on your shopping cart system, the
credit card data is then sent through an
authorization and verification process which
then allows the total amount of the sale to be
deducted from the customers’ credit card.
After the funds have been successfully deducted
from the credit card, the merchant bank will
then proceed to process those funds, deducting
their transaction and processing fees and then
depositing those funds directly into your
business or personal bank account within 48 to
72 hours, and sometimes less.
Rate and fees
Many business owners believe that it’s too
expensive to accept credit cards online. And
this may be true with some banks who charge
annual renewal fees in addition to transaction
and processing fees.
However, there are numerous merchant account
providers that charge a small percentage of the
total sales amount when accepting credit cards
online.
Those fees can range from 2.5% to 3% per
transaction. And there may be other fees as well
such as Internet transaction/batch fees, address
verification fees, monthly
service/support/statement fees, and chargeback
fees.
NOTE: Rates and fees may vary with merchant
account providers so be sure to shop and
compare.
Applying for a merchant account
Most people believe that it’s difficult to apply
and get accepted for a merchant account,
especially if you’re a new business just
starting off. However, applying and getting
approved for a merchant account is not that
difficult at all.
Furthermore, many merchant account providers
boast a 98% acceptance and approval rate for new
applicants even if you’ve never accepted credit
cards before.
When getting approved for a merchant account,
there are two departments who will make the
final decision on whether or not your
application gets approved: An ISO (Independent
Service Organization) and the underwriter. Any
many times, the ISO serves as the underwriter as
well. |
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The
ISO carefully evaluates the future risk and
success of the new business and approves or
denies the applicant based upon these factors.
And if the business owner violates the terms and
conditions of the agreement of the merchant
account then the ISO/underwriter will close down
the merchant account as well.
However, most new
applicants are able to get approved without any
problems within 24 hours or less. And the
success of your internet business relies greatly
on the ability to accept credit cards online.
Consumers want to be able to shop online using
their credit cards in a safe and secure manner
without having to mail in a check or money order
or wait for a payment to clear before their
product can be shipped.
Furthermore, the average consumer will spend
more on your online store when they’re able to
shop using credit cards. And they can also use
their debit cards to deduct the money from their
checking account without having to pay interest
rates or credit card fees.
Suffice it to say that just about all internet
businesses now accept credit cards online. And
if you want to compete with your competitors
then your business will have to do the same. |
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How much does a
Merchant Account cost?
With our partner merchant account provider
Cayan merchant services it’s free to get
started.
The application fee has been waived.
The
programming charge is free.
And getting set up
to accept American Express and Discover Card is
free just as well.
Cayan merchant services has everything you need
to start accepting payments today. Leverage
their top of the line payment processing
services and be able to access optional tools
and improved ways for you to do business.
Perfect for all businesses looking for
standalone payment processing solutions. Call
for a free
quote today 1-844-210-7336.
No Setup Fees, No Annual Fees,
Lowest overall payment processing cost. 'No
Cancellation Fee' policy reflects commitment for
best ongoing support.
Visit the
Cayan merchant services
website today for a free quote!
Call Cayan merchant services today for a free
quote: 1-844-210-7336
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Cayan merchant
services has everything you need to
start accepting payments today. Leverage their
top of the line payment processing services and
be able to access optional tools and improved
ways for you to do business. Perfect for all
businesses looking for standalone payment
processing solutions.
Call for a free quote today 1-844-210-7336 |
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