Do I Need a Merchant Account to Accept Credit Cards?

Let’s understand a merchant account first. Briefly, a merchant account is a facility provided by a bank for a merchant, you, to route money from credit card sales to your bank account. A sale is made, paid for by credit card, and the funds reserved for you. In-between the transaction follows many steps between your customer’s bankers and your merchant credit card processing service provider before it ends up in your bank account. While this is all going on, the funds are reserved in your merchant account.

If you want to accept credit card payments, you must use a merchant account. If you want to accept credit card payments online, you will have to use a ‘card not present’ merchant account.  This will either be your own merchant account or a shared merchant account, that is used by many people.  But don’t try to use someone else’s individual merchant account to accept payments, even if you have their permission.  This is called “factoring” and it is forbidden by the credit card companies.

It sounds really complicated

It can seem complicated at first, but don’t let that put you off accepting credit card payments for your business. Merchant accounts can marketed to merchants by two basic methods: either directly by the merchant processing services provider, or directly by a sponsoring bank or an authorized agent for the bank.

If you choose the right card processing services provider, they will take care of a lot of the more complicated stuff for you. They will also guide you through the whole process so that you fully understand how it all happens. A merchant account services provider not only opens a merchant account for you. They will also be able to manage your whole credit card payment system for you.  That means that you won’t need to have any software, equipment or accessories of your own to accept credit card payments. If you are selling online, all you need is your website. A reputable card processing services provider offers you the solutions that suit your business needs, and they also protect your businesses integrity by ensuring that all card payments accepted are secure, and that all their systems are compliant.

How do I know if it’s the real deal?

If you choose correctly, you will know it’s the real deal because the card processing services provider will explain and enter into an agreement with you that covers respective rights, warranties and duties of the service provider and the merchant. These duties often reduce credit card fraud, and buyer/ seller misunderstandings. You also want to choose a processing service provider that offers you optimum levels of security and protects your sensitive transaction data.

Shop around and compare service fees, contractual responsibilities, setup fees, cancellation fees, technical support services and market reputation before making your decision. A reputable card processing service provider takes care of a lot of the background work for you so that you can focus on running your business.

For more information on opening a merchant account to accept credit card payments, or to sign up for a merchant account, please call (888) 924-2743 or go to 

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