A Quick History of Merchants

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 is a credit line that needs to be reconciled regularly alongside payment processors 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 yield low fees and rates and are convenient for physical retail outlets.

Card present accounts have various subgroups. For instance, wireless merchant processing accounts which use portable credit card machines. 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 ideal for businesses that are on the move and do not require credit card acceptance, but have low ticket value and few credit card declines.

The other types of card present accounts are meant for specific enterprises. For example, grocery merchant service accounts for enterprises that sell consumer goods that perish quick and do not deal with gasoline. Lodging accounts for businesses with stores within units where customers spend nights. Restaurant merchant accounts which are capable of making changes to customer transactions to exclude certain percentages after a credit card has been authorized.

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. Transactions on these types of accounts have no evidence of the physical presence of a customer during a transaction, hence they are very risky and attract high charges. 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. Merchants manually work out details and fulfill orders once the cards are accepted.

Touch tone accounts require customers or entrepreneurs to feed credit card details to a touch-tone phone for a transaction. It is a procedure that requires no credit card machines. Authorization numbers for these type of transactions are given verbally and must be marked on a customer’s receipt. It is considered risky and attracts high fees.

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