Merchant Bank Account : Best Reviews of 2018
Merchant account is a contract between a business and a bank or a financial institution. This contract ensures that the bank accepts payments for the products or services on behalf of the business. These Merchant Bank Account acquiring banks ensures that a merchant or company can accept payment from international customers for the products or services they deliver. Thus merchant accounts form a vital part of any E-commerce business.
There are two types of merchant accounts. First is the normal account, where the Merchant Bank Account can directly access the card and ensure that it is a legitimate customer, thereby the risk involved is minimal. The second type of Merchant Bank Account involves the accounts where it is not possible to visually testify the customer. These types of accounts include adult entertainment merchants, online tobacco merchants, replica merchants, online gambling merchants, pre-paid calling merchants, VOIP merchants, multilevel marketing merchants, or any transaction that takes place with the customer physically not present. Thereby, the possibility of fraud activity is much greater with this type of business which results in classifying these types of accounts as “high risk” ones. Naturally, these high risk merchant accounts present the risk of the dreaded charge backs for the banks in question. It has been proved by various researches that these high risk processing transactions are more susceptible to fraudulent transactions.
Merchant Bank Account : Things to Note and Avoid
Accepting Credit Cards
As a small business or a small-small business (under 10 employees) it is important that you consider accepting credit cards if you don't do so already. People expect to be able to pay with plastic. They can pay with credit cards at fast food restaurants, gas stations, coffee shops and more. It is just expected, fairly or not, that a business be able to accept credit cards.
The first thing you need to do is evaluate Merchant Acounts. You may naturally assume that it is just easier to use your bank to set up your account. Well, that is convenient, but is it really in your best interest.
Many small businesses fall into the trap of latching onto their first merchant account and staying with them because of the convenience. They do this to their detrement. Over the past few years rates have lowered, while these small companies, out of loyalty or convenience, have been stuck paying the same rate they had when they first started.
Online merchant accounts are another consideration. You will need virtual versions of the credit card processors described above:
- Secure Gateway: This translates the information entered onto your website into data that can be read by an electronic card processing system.
- Virtual Terminal: This eleminates the need for a physical point-of-sale card processing system.
- Online Shopping Cart
- Virtual check processor
- Wireless terminals
Go into acquiring a Merchant Account with your eyes open. It is a service that you will need if you plan on being competitive, so make sure you do it right.