Understanding Internet Merchant Account Options
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Posted On :
Mar-24-2010
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Article Word Count :
860
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Today’s merchant accounts are simpler to use, easier to apply for, and offer fewer fees and restrictions than the accounts offered even a few years ago. They also offer a wider selection of options that can help keep your business competitive. Real-time Internet merchant accounts are rapidly becoming as common as retail merchant accounts, and are an essential component for nearly any business operating on the web today.
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By opening a merchant account for your business, you’re helping your business remain competitive and profitable by making it more attractive to the consumers you serve. And by providing the services that allow your business to accept credit cards – and often debit cards and gift cards – as payment for your goods or services, you make your company and its products more appealing to a much wider group of consumers who today turn to credit cards for the bulk of their purchases, both large and small.
Today’s merchant accounts are simpler to use, easier to apply for, and offer fewer fees and restrictions than the accounts offered even a few years ago. They also offer a wider selection of options that can help keep your business competitive, whether you operate from a traditional storefront location, on the Internet, on the road, or otherwise. Knowing the options offered by today’s merchant account providers is the first step in ensuring that the provider you choose offers the choices you need to make your business grow and thrive in every economy. This article highlights the most common types of merchant accounts and some of their services and solutions.
Retail Merchant Accounts
Retail merchant accounts are arguably the most common and most familiar type of merchant accounts offered by merchant account service providers. These accounts serve the needs of businesses that offer their goods or services from a traditional storefront or retail establishment, and usually involve the use of a point-of-sale (POS) or “swipe” terminal to gather credit card information.
The way a retail merchant account appears to work is deceptively simple: the salesperson rings up the sale, the customer swipes his or her credit card, and the transaction is processed or denied. But in fact, the actual underlying process is much more complicated, and involves a series of steps that both validate and verify the account information and process the actual transfer of funds from the credit card issuer to the business owner’s bank account.
The way it works is this: the purchase is rung up and the buyer swipes the credit card through the terminal’s slot. The terminal gathers the card’s encrypted information and transmits it to the credit card issuer over a dedicated telephone connection. Once the information is received, the card issuer’s software determines if the card is valid and whether or not there are enough funds in the account to cover the price of the current transaction.
Next, a code is returned to the business’ location, indicating whether or not the transaction is approved. For approved transactions, a receipt is printed and the amount of the sale is debited form the cardholder’s account and held by the merchant account provider until the end of the day, at which time all sales are tallied and fees deducted before the final amount if transferred to the business owner’s bank account. Of course, al of these steps occur in just a few seconds, thanks to modern technology.
Real-time Internet Merchant Accounts
Real-time Internet merchant accounts are rapidly becoming as common as retail merchant accounts, and are an essential component for nearly any business operating on the web today. Real-time accounts are those in which credit card transactions are processed as soon as the information is entered into your website’s shopping cart system, and operate much the same as retail accounts. The major difference is that Internet merchant accounts use an added software-based service, called a gateway provider or weblink, to help online transactions proceed more smoothly and to help guard against fraud, which is more prevalent than in retail accounts, where transactions occur in a face-to-face environment.
Virtual Terminals
Virtual terminals are another account option, and one which is most often used for so-called MOTO (mail order/telephone order) accounts and some Internet accounts – notably, those that expect a relatively low sales volume. In these accounts, credit card information is obtained via mail, telephone, or website, and then entered manually into a virtual terminal – a software application that works in much the same way as a POS terminal. Because these accounts require credit card information to be manually entered, when used for an Internet business, they are best used for businesses expecting a relatively low daily sales volume, in order to allow all daily orders to be processed.
Mobile accounts allow businesses to operate on the road, using a POS terminal that hooks directly to a mobile device, such as a cell phone, or a laptop, or using the keypad of a mobile device to manually enter credit card information. These are the most recent introduction to the merchant account field.
The type of merchant account service you select – and whether your business needs more than one type of solution – depends largely on the products you sell and the way you do business. When selecting services for your account, be sure to think of your business’ future needs, in addition to what you need today, and make sure the provider you choose is able to handle your business’ growing needs.
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Article Source :
http://www.articleseen.com/Article_Understanding Internet Merchant Account Options_14464.aspx
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Author Resource :
Karen Zabel is a freelance writer who writes about businesses that offer services such as credit card processing service.
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Keywords :
North American Bancard Reviews, North American Bancard Reviews,
Category :
Business
:
Business
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