MERCHANT ACCOUNT

Has your business started growing? Want an accountto accept credit or debit card payments? Then it's a right time to open a merchant account. A tradesperson accountin Americahelpsyou in accepting credit cards without any hassles. It's better to have atleast one e-merchant account even if you have a tradesperson account.

A merchant account is a kind of bank account that is mainly for business a d these accounts allow acceptance of payments in various forms like the debit or credit cards. This account is basically a contract between a retailer, the merchant bank you deal with, and the payment processor which helps you in settling the debit card or the credit card proceeding. Tradesperson account is an intermediary between the customer and the business bank account. When a customer first pays for either the product or service received the credit card payment first gets credited to the tradersaccount and then over a period of time gets credited into the business bank account. Transfer from a merchant account to a business bank account may take a day or within a week.

Getting a merchant account:

Applying for anaccount and getting it is not a sure process even though the issuing of tradesperson account business is highly competitive. To minimize the risk vendors haveseveral criteria that are assessed before approving anaccount application.

Business type-the risk in this particular business is analyzed. The chances of having a highor a low risk or credit card returns or fraud is studied well in advance.

Duration of the business being carried out.

Any previous business history like defaults or bankruptcy isconsidered.

Did the applicant previously possess a merchant account is also of importance.

The personal credit history of the applicant that is the owner of the business is also taken into account.

Most of the new business owners who have ventured recently into business mostly receive a high favorable review of theseaccount applicationsfrom the bank that has their personal or business account. This does not mean having a higher risk will be denied a business account. There are high risk merchant account providers . To tackle the high risk, initially the vendor will just demand higher fee to manage the high risk. As the business builds up the fee is negotiated at a later date.

Internet merchant accounts:

An internet merchant account is specifically created for the purpose of collecting the proceedings received from the online portal of processing the credit card payments. The other difference between the merchant account and the internet merchant account is the fees. The fees arehigher for internet merchant account. This is because the risk of online payment of credit card is much higher as compared to the face to face debit card or the credit card transaction.

For accepting the payments by credit card there has to be a payment gateway.This payment gateway does the job of authenticating the information provided by the credit card. It also submits the request for authorization of the payment done by the credit card to the credit card company issuer.

Marketing of the merchant account:

There aretwo waysan accountcan be advertisedto the merchants. One is by the sponsoring bank or the processor directly and other method is through the bank's authorized agent and with an additional registration withboth Master card and Visa as amember service provider (MSP) or an independent selling organization (ISO).

1. Marketing by the bank: A member bank having the merchant transforming affiliation with Visa and Master card have the right to dispatchmerchant accounts straight forwardto the merchants. To minimize liability, fewbanks approve theaccounts to those who reside within a set geographical area, or those who have a physical store for retail business, or to those who are into trade for more than two years.

2. Marketing by ISO/MSPs: To every account, the member bank must have sponsored an ISO/MSP. For this sponsorship, the bank needs to authenticate the monetarydependabilityof the establishmentthat does the marketing. The ISO/MSP must pay a fee to the Master Card/ Visa to be registered and must follow all the rules and regulations laid by them.

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