Merchant Accounts
A merchant account is an account that enables merchants to accept credit card payments.
They can be obtained through a bank, credit card company,
or other payment processor. The three main types of merchant accounts are Retail merchant
accounts, MOTO merchant accounts, and Internet accounts.
Retail merchant accounts usually offer the lowest transaction fee, but they also usually have
rules that are restrictive. Retail merchant accounts requires that a high percentage of credit
card sales be carried out with the card present and the card be swiped by passing it through a
physical credit card terminal. This type of account is usually associated with businesses such
as restaurants, grocery stores and small hotels. It is most suitable for merchants who don't plan
on conducting business through the mail or online at any point.
MOTO merchant accounts or Mail Order – Telephone merchant accounts are more likely to charge a
higher transaction rate. They are used when a credit card cannot be physically swiped.
Merchants usually process credit card payments by entering the credit card information directly
into a terminal installed on a personal computer, or through a normal web browser to handle
transactions on a payment service provider's web site.
Internet merchant accounts are very much alike MOTO accounts except that they can only be used for
internet transactions. Vendors with internet accounts use a virtual terminal or payment service
gateway to process credit card payments. These payment service gateways are now included with most
business web hosting packages.
A merchant account has a variety of fees, some are periodic, while others are chatged on per-item
or percentage basis. Some fees are set by the merchant account provider, but most of the per-item
and percentage fees are passed through the merchant account provider to the credit card issuing
bank according to a schedulre of rates called interchange fees, which are set by Visa and Mastercard.
Interchange fees vary depending on card type and the circumstance of the transaction.
