How Merchant Accounts Work

Offshore credit card processing

How Merchant Accounts Work ?

Merchant accounts are basically bank accounts that your business can use to accept credit and debt card payments. There are two kinds of merchant accounts: over the counter merchant accounts and money order/telephone order merchant accounts.

Fees

As compared to money order/telephone order merchant account, fees for transactions are lower in over the counter merchant account. There is also a higher risk of fraud in money order/telephone order merchant account. You will need a money order/telephone order merchant account if you are running an online business. Once your client enters all of their credit card details into a form on a website, the verification process of the details begins. After verification, the money is taken out from the account of the credit cardholder.

Getting Approval

Many people think that it is incredibly difficult to get an approval for a merchant account, especially if the business is new. This is baseless as the approval rate of a number of merchant account providers in the range of 95%. Accepting credit card payments is a not a costly exercise, as you only need to pay a small percentage of the sale amount when processing a credit card.

Success

Your e-commerce business will only attain success when you possess an ability to accept credit cards. Your sales figure is not going to be high if you only accept bank based payments. People want to use their credit cards when shopping online and they expect a safe and secure environment from the business owner.

Setting Up and Running

To setup a merchant account, you need to contact your bank or a third party company. You also need to create a form on your web site where clients can enter their credit card details. To create the form, there are wide array of different scripts available. You do not need to worry about the complexity of programming language when creating the form, as coding is quite straightforward.

For processing credit card payments, you need to pay for the service. There are plenty of services available on the internet. Most of these services will ensure that you can set up a merchant account without any problem.

Another thing that is quite important in the setting up of merchant account is the security of your website. If your website has an SSL certificate, it will give your clients confidence that your website is safe and secure. Each time you process a credit card transaction you need to pay an inquiry fee and a percentage of the complete transaction. The inquiry fee is a flat amount in the range of 20 to 30 cents.