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What is a Merchant Account?

What is a Merchant Account? - Credit Card Processing - Articles



If you want to start accepting credit cards at your company, you need a merchant account. Merchant accounts are what actually run the credit card processing system, as we will explain.

A merchant account is the best and easiest way to accept credit card payments from your customers. A merchant account brings you and your company into a credit card processor. This allows you to accept credit card transactions from your customers then be able to put that money into your bank account.

There are two different types of merchant accounts. A "card present" merchant account and an Internet merchant account. In a "card present" account, the credit card is present at when the card is swiped through a credit card terminal. With an Internet account the card is not physically there.

To get a Merchant Account you have to fill out an application with your desired credit card processing company and then you have to get approved. Your local bank can offer credit card processing services but their application process is very rigorous and they are very selective. Also, banks cannot provide web-based services like specialized credit card processing companies.

After you get approval from your desired credit card processing company, you need a way to process the transactions. You will either have a physical terminal to where you can swipe the cards or, you can get software especially if you have an e-business.

When you successfully set up your merchant account and have all the necessary tools you can begin to accept transactions from credit cards. When the credit card transaction is made and is not declined then it goes into your merchant account. If however the credit card is declined then no funds will be put into your account. You will be able to receive the total amount in your bank account at the end of the day.