What is a Merchant Account? E-Commerce 101

E-Commerce 101: Merchant Accounts

I’m going to start a series of blog entries that cover the beginning steps of opening an online store. This is the first of the series. Enjoy!

A Merchant Account is a relationship between an online retailer and a merchant bank that enables retailers to accept web-based credit card payments from their customers. This is the account which a Merchant Account provider deposits payments into the merchant's business checking account from the transactions that are made online. To qualify for a merchant account, retailers must meet the bank's requirements.

Popular merchant account banks that cater to online merchants are Authorize.net, Paymentech and USAePay. For reviews of these merchant account providers, please visit of forum or click on the link under Additional Information.

I've used Paymentech and Authorize.net for a number of years. Of the two, I'd say Authorize.net is a little more advanced but Paymentech is easier for the merchant to use.

Before signing up for a merchant account, ask your e-commerce solution which one works best with their solution. This can make a huge difference down the line. For instance, Volusion recommends Authorize.net because of the union between the two unlocks greater functionality. This functionality includes storing all credit card information on the gateway - not in your store's database. The merchant can also authorize payment at the time of the sale and capture the funds when the order ships (this is a MUST have feature).