Did You Know About the Various Merchant Accounts to Choose From?
A merchant account is a platform that facilitates the processing of payments to business people via debit cards, credit cards, gift cards, and checks. It requires routine settlement with an entrepreneur’s bank along with payment processors like VISA or MasterCard. The type of merchant account perfect for a business depends on its industry and model.
There are two primary types of merchant accounts; card present, and card not present. A card present account requires a card to be swiped during a transaction with a customer. It is a low-risk type because the customer is always present during a transaction and signs to approve the transaction. These kinds of accounts are favorable for physical retail outlets and their transaction fees or rates are low.
Card present types can be further categorized to meet specific needs. For example, a wireless merchant processing account which utilizes a portable credit card machine. It applies the same concept as the regular type and is perfect for businesses which require receiving money in the field, like home repairs.
A store and forward account type allows credit card information to be held in a handheld device, but does not process the information. 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 are meant for specific enterprises. For example, a grocery merchant service account for outlets that sell perishable goods, but no gasoline. Lodging accounts for businesses with stores within units where customers spend nights. A restaurant merchant account that allows a business to authorize a customer’s card, and then go back to adjust for gratuity.
Card not present accounts facilitate transactions even when credit cards are not physically present. They favor enterprises that are internet based, telephone sales, and mail order businesses. 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 used by e-commerce businesses to process orders in real time over the Internet. The transactions are processed through electronic gateways which accept or reject credit cards promptly.
Mail order accounts require customers to fill out their credit card information and their dispatch to merchants for a transaction. Merchants are responsible for keying in the credit card information and running them for approval, after which they deliver orders if the cards are okay.
Touch tone accounts require customers or entrepreneurs to feed credit card details to a touch-tone phone for a transaction. There is no need for credit card devices in this type of transaction. Authorization numbers for these type of transactions are given verbally and must be marked on a customer’s receipt. It has high rates and is very risky due to third-party involvement.