Sunday, November 29, 2015

What is Merchant Account? (part 1 of 2)

Whenever you are finishing of an online transaction, like paying for your airline ticket, did you ever wonder how online transactions work?  There is a “bank account” established with a payment processor for the settlement of credit card payments or transaction online.  You call this account, merchant account.

Merchant accounts provide businesses with the ability to accept credit card and debit card to pay for the purchases.  Payment transaction is very simple when customers are paying with cash, but when it is made through credit cards of checks it gets complicated and complex.

It is becoming a reality that there is a need for businesses to attract not only cash paying customers.   For businesses, a credit card payment could be more secure than paying with checks.  Why?  Because when a customer is paying with a credit card, the bank who issued the card commits to pay the establishment the purchased amount, unless in a case when it gets charged back to the establishment.

There are also some entrepreneurs that feel that credit card payment could even be more secure than cash payment.  With card transactions, it limits the amount of cash in the register, limiting the loss to theft.   For online or e-businesses, credit card payments is the main form of online payment.  These reasons make it important for companies and businesses in accepting credit card payments.

To set up a merchant account, the proprietor or business owner can set up an account with a merchant services provider.  There are several Merchant Service Provider in the market.  Surely, you would have heard anything about PayPal, Merchant Warehouse, or Paymerica.

When choosing a merchant service provider, it is important that the business owner chooses a service provider that can  be trusted.  Reputation and reliability is important whenever checking out merchant account providers. John Conde, the author of  “Everything You Need to Know About Merchant Accounts”  , wrote that getting or establishing  an account can by a smooth process.

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