The language of Merchant Accounts


by Jack Chevalier - Date: 2007-01-31 - Word Count: 459 Share This!

Merchant account services are provided by banks and financial institutions to set up Visa, Discover, American Express and MasterCard merchant accounts. These service providers process credit card payments in exchange for processing fees. Approach a bank directly or a merchant account service that can help you start accepting payments as soon as possible. Your service provider must have amicable relationships with banks and financial institutions, ensuring that the services you receive are good quality and appealing.

There are several Merchant Account Providers on the internet. These providers are called Independent Sales Organizations in Industry terms. Make certain that you investigate these companies prior making any payments for their e-commerce certified merchant services.

Once you're ready to accept payments though our merchant account, you must know what a Transaction Processing Clearinghouse is. A Clearinghouse refers to the organization that authorizes and validates the credit card received during the payment process for a shopping cart on your e-commerce website.

The final piece to setting up a merchant account to accept online payment is the gateway that connects you to the transaction clearinghouse. There are three common gateways:

1- Credit Card Swipe Machines- machines that are seen at the counter top at every store. The card is swiped through the machine ad a transaction slip is produced. The authorization comes from the clearinghouse, and as the customer signs the slip, a valid payment to the merchant is confirmed.

2- Desktop Software- For online businesses, soft wares may be used as the transaction gateway. The credit card number received via phone, mail, or email is manually entered into the computer software, and transmitted over the internet to the clearinghouse. This software solution, though better than swipe machines is not practical for large volume stores. Also, re-keying data from each order into a computer can cause user errors and can be a lengthy process.

3- Real-Time Web Gateways- Real-time gateways are common with most ecommerce shopping cart softwares. With real-time gateways, a merchant can authorize and validate credit card payments through a clearinghouse while the customer is still online.

The cost of a merchant account varies from one Merchant account provider to the other. The cost of a merchant account would also depend on your line of business. For instance, online casinos and gambling websites, where chances of fraudulent activities is heightened, will have to pay much more for a High-risk merchant account. Similarly, International Merchant accounts are more expensive. Also, the deviation in cost among providers is due to the fact providers usually have hidden costs. You may have to pay separately for services such as shopping cart, etc, besides the set up and the maintenance charges that you shell out. So, you need to closely study your options and choose the service that gives you value for money.


For more information , visit www.paynetsystems.com

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