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Did You Know About the Various Merchant Accounts to Choose From?

A merchant account is an avenue on which business people can work out their payments from debit cards, credit cards, gift cards, and checks. It is a line of credit that you will routinely settle with your bank along with a payment processor like VISA or MasterCard. The type of merchant account you need for your business depends on the type of industry and business model.

There are two primary types of merchant accounts; card present, and card not present. In the card present type of account, a credit card must be physically present during a transaction to be swiped. Its risks are limited because all transactions bear customer signatures as their sign of approval. These types of accounts yield low fees and rates and are convenient for physical retail outlets.

Card present types can be further categorized to meet specific needs. For example, a wireless merchant processing account which utilizes a portable credit card machine. It applies the same concept as the regular type and is perfect for businesses which require receiving money in the field, like home repairs.

A store and forward account type allows credit card information to be held in a handheld device, but does not process the information. It is suitable for enterprises that are mobile and do not need credit card acknowledgement, and have low ticket value and minimal credit card rejections.

There are other types of card present accounts designed for particular businesses. For example, a grocery merchant service account for outlets that sell perishable goods, but no gasoline. A lodging account for businesses within units where customers sleep over. A restaurant merchant account that allows a business to authorize a customer’s card, and then go back to adjust for gratuity.

Card not present account types do not restrict transactions due to the absence of a credit card. They favor enterprises that are internet based, telephone sales, and mail order businesses. It is very difficult to guarantee that a person was present during a transaction with these type of accounts making them very risky and highly charged. They have various subgroups as well.

Internet accounts are used by e-commerce businesses to process orders in real time over the Internet. The transaction is completed through an electronic gateway that either accepts or declines the card instantly.

Mail order accounts require the customer to fill out all their credit card details on an order form that is then sent to the merchant for processing. Merchants manually work out details and fulfill orders once the cards are accepted.

A touch-tone telephone account usually prompts a customer or vendor to enter credit card information over a touch-tone phone. This type requires no credit card equipment. Authorization numbers for these type of transactions are given verbally and must be marked on a customer’s receipt. The process is uncertain and charges high rates.

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