Are You Aware of the Right Merchant Account for You?
A merchant account is an avenue on which business people can work out their payments from debit cards, credit cards, gift cards, and checks. It is a line of credit that you will routinely settle with your bank along with a payment processor like VISA or MasterCard. The type of merchant account you need for your business depends on the type of industry and business model.
There are two primary types of merchant accounts; card present, and card not present. In the card present type of account, a credit card must be physically present during a transaction to be swiped. 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. For instance, wireless merchant processing accounts which use portable credit card machines. 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 suitable for enterprises that are mobile and do not need credit card acknowledgement, and have low ticket value and minimal credit card rejections.
The other types of card present accounts include specialty businesses. For example, a grocery merchant service account for outlets that sell perishable goods, but no gasoline. A lodging account for a business located on the premises of a unit where customers sleep over. A restaurant merchant account that allows a business to authorize a customer’s card, and then go back to adjust for gratuity.
A card not present account does not require a card for a transaction to happen. They are suitable for Internet-based businesses, telephone sales, and mail order enterprises. It is very difficult to guarantee that a person was present during a transaction with these type of accounts making them very risky and highly charged. They also have subdivisions.
Internet accounts are utilized by e-commerce enterprises to make online transactions in real time. The transactions are processed through electronic gateways which accept or reject credit cards promptly.
Mail order accounts require the customer to fill out all their credit card details on an order form that is then sent to the merchant for processing. The merchants enter the credit card details and when the credit card details are accepted, they dispatch an order.
Touch tone accounts require customers or entrepreneurs to feed credit card details to a touch-tone phone for a transaction. This type requires no credit card equipment. An authorization number is provided verbally and should be noted down on a receipt for the customer. It has high rates and is very risky due to third-party involvement.