A Merchant Account is a bank account in which funds are collected by a bank from credit card purchasers and disbursed to the merchant holder. Because banks define a Merchant Accounts similar to that of a loan, they underwrite the issuance of a Merchant Account in a similar manner, requiring an application, supporting documentation like tax returns, acceptable products/services and good credit. Non-bank institutions tend to be more liberal in issuing Merchant Accounts, requiring only name, address, company registration and Identification. Merchant Account Associates works with both kinds of companies to ensure you receive the best deal available.
Typical merchant account charges include a percentage of each sale (1.5-5%) and a smaller transaction fee (25¢-50¢) for each purchase. Despite some providers' claims to the contrary, these fees are almost always initiated.
The processor acts as an intermediary between the purchaser and merchant, receiving the purchase request from the purchaser, verifying funds available in the purchaser's credit-card account, transferring the funds to the merchant's Merchant Account, and confirming the successful transaction to both the purchaser and merchant.
Beware of "No
The main issue with Online Payment Services (or Full E-commerce providers, as they often call themselves) is that their fees are often exorbitantly high (between 10-30%). This way, they can afford to accept good as well as bad merchants, write off losses from the bad, and still maintain extremely high profit margins.
Online Payment Services also protect themselves against 'bad merchants' by limiting the monthly processing amount This is a very important consideration because once the monthly maximum is reached, sales will be lost because the processor will simply stop processing orders.
Before you make a merchant account and credit card processing decision, we recommend you contact us, via our quick contact form.