Understanding Transactions

Are You Aware of the Right Merchant Account for You?

A merchant account is an avenue on which business people can work out their payments from debit cards, credit cards, gift cards, and checks. It requires routine settlement with an entrepreneur’s bank along with payment processors like VISA or MasterCard. The type of merchant account perfect for a business depends on its industry and model.

There are two main types of merchant accounts; card present, and card not present. Card present requires a customer to present a credit card to a vendor during a transaction. Its risks are minimal since customers approve transactions through signatures. These types of accounts yield low fees and rates and are convenient for physical retail outlets.

Card present types can be further categorized to meet specific needs. For example, a wireless merchant processing account which utilizes a portable credit card machine. Their concept is similar to that of regular accounts and they are good options for enterprises which handle transactions during field operations, 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 suitable for enterprises that are mobile and do not need credit card acknowledgement, and have low ticket value and minimal credit card rejections.

There are other types of card present accounts designed for particular businesses. For instance, a grocery merchant service account which is designed for businesses which deal in perishable goods and exclude gasoline. Lodging accounts for businesses with stores within units where customers spend nights. A restaurant merchant account that allows a business to authorize a customer’s card, and then go back to adjust for gratuity.

A card not present account does not require a card for a transaction to happen. 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 transactions usually prompt a customer to provide their credit card details on a card that is then sent to the entrepreneur for processing. Merchants are responsible for keying in the credit card information and running them for approval, after which they deliver orders if the cards are okay.

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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