BBBMerchant Account Providers - Accept Credit Cards Online

Establishing A Merchant Account
Whether your business is large or small, you must have a merchant account if you want to to accept credit cards. By establishing a merchant account, you set up an arrangement with a credit card processor allowing you to accept credit card payments that are then deposited into your bank account. While there is no obligation to have a merchant account it would not make business sense, especially in the case of an online operation, to turn away potential customers by refusing to accept payments by credit card.

A merchant account can operate as either a "card present" or a "card not present" account. The "card present" type is used when the customer presents a credit card that can be swiped through a terminal to verify that the charge can be made. The "card not present" type is used for sales where the card is not physically available, such as online, mail or telephone transactions.

Once you have decided to establish a merchant account you need to apply either to a merchant service provider or a merchant bank. If you are running an online business, it is often easier to set up an account with a merchant service provider, as many local banks choose not to provide Internet merchant accounts. They are also often reluctant to establish a merchant account for a new or high risk business, or for an applicant with no credit history.

Obtaining a merchant account from a merchant service provider can be easier and less expensive than dealing through a bank, but various fees will still apply. Merchant account costs are complex, with different charges applying to different types of cards, and will also vary according to the circumstances under which the cards are processed. You should take time to investigate these fees before applying to a particular provider. Issues to consider include whether you will be required to pay fees in advance, such as an application fee and costs for setup and installation, before you can begin to use your merchant account to accept credit card payments.

As well as understanding the fees involved in establishing and using a merchant account, you should ask about any other costs and conditions. Some providers, for example, may require you to set up an account with their bank before approving your application. Other providers do not make this a condition. Before finalizing your merchant account you should also compare the fees charged by providers, especially the discount rate. This refers to the percentage charged on each transaction by the processing company, and is the most common fee associated with a merchant account.


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