What Do I Need To Know About Getting A Merchant Account?


A merchant account is a relationship you have with a bank. In this trust, the bank agrees to allow you to charge people’s credit cards for goods and/or services you provide. The bank in turn, has the responsibility for debiting the funds from the customer(s) and depositing it into your account. When you acquire a merchant account from a bank, you are expected to uphold your promises to your customers by fulfilling your end of the business transaction in a timely manner.
Selecting a merchant provider is a critical element when doing e-commerce on the Internet. It is important to understand the fundamentals of what a merchant account is, and how it will affect your business. Armed with this information, selecting a merchant provider from the many available will be an easier task.

Typically, you have two options when it comes to acquiring a merchant account. First, the normally preferred method, is to acquire your own merchant account. This gives you the most flexible relationship possible when it comes to accepting credit cards as payment. The second option, is to use a third-party merchant account. This means that another party allows you to accept credit cards using their merchant account. This is typically more expensive, percentage-wise, but is a viable option for people with very low volume or who are unable for some reason to get their own merchant accounts.

Side by side comparison of advantages/disadvantages

There is no “magic” when getting a merchant account. You do not dial a phone number and 10 minutes later have the ability to accept credit cards. First, there is an approval process that needs to be followed. Depending on your provider, this could take anywhere from 30 minutes to a few days. Once you have been approved, your merchant account can be ready for use in less than a week.

Even when your merchant account has been approved and is ready for use, there is still the matter of logistics. How will you process your credit card transactions? Will you manually type your transactions into a software program or a credit card terminal? Or will you opt for real-time credit approval, and automate your website to process the transactions automatically? The first option requires that you purchase software or equipment to process the credit cards. If you purchase equipment, it needs to be programmed by your merchant provider to authenticate with their network and utilize your merchant account. If you choose to utilize the real-time option, you must affiliate yourself with an Internet “gateway”, who will charge a fee (typically a flat monthly fee) to be your connection to your merchant.

When accepting credit cards through a merchant account, there are a number of fees involved. It is important to understand these fees, as it will help in the selection of an appropriate merchant provider.

In summary, there are many merchant providers available to assist you in obtaining the ability to accept credit cards as payment for your goods and/or services. Having a basic understanding will allow you to make an educated decision when it comes to selecting the right provider to help make your business successful.