All About Merchant Accounts

Merchant Account 411

For those new to ebusiness, here is an overview of all you need to know about merchant accounts. Merchant accounts offer a way to ease your tasks while dealing with all your financial transactions in the form of the Merchant Service Provider system. This payment system allows you to conduct all your credit card payments whether its goods or services. The Merchant Service Provider facilitates you in easy processing of credit cards.

Going ahead of the traditional credit card terminal, the merchant of today can opt to rent, buy, and lease or secure the terminal in exchange for some contractual obligations from a merchant processor, of course, the business owner must carefully review the terms and conditions before selecting a merchant processor and a credit card terminal

There is also another facility called the Automated Response Unit or the ARU, which allows only manual keyed entry and the authorization of a credit card over a land-line telephone or a cellular phone. This helps imprint (with an imprinter) that particular customer's card to complete the entire transaction over the phone immediately.

These merchant accounts charge a certain fee for all your transactions, usually on a monthly basis, percentage or per-item basis as per a schedule of rates set by Visa and MasterCard. There are about 130 categories classifying the nature of your transaction. The MSPs group these into 3 or 6 categories and fix a single rate for the entire range comprising retail, mail, phone, ecommerce and Card Not Present.

There are different charges for different credit cards. The cost of a check card costs lesser than a consumer card, for instance. Usually the Merchant service providers follow 3-tier pricing with a different rate for each tier. Of late, the 6-tier pricing and the interchange plus basis of rating are becoming popular with the businessmen.

The responsibility of these tiers is to set differet costs different type of credit cards which might be processed under different circumstances. It’s essential to make sure that a business card is more costlier when compared to a consumer card which is, but more costlier than a check card

For regular customers, a certain percentage rate called the qualified rate will be charged to the merchant every time his credit card is accepted. Whenever they accept your credit card which does not qualify the lowest qualified rate, you will be charged a mid-qualified rate.

You will be charged an authorization fee every time you send your transaction for processing. This apart, you will have to pay a statement fee and a monthly minimum fee every month and a batch fee each time you complete transactions for the day and send them across for processing.