Types of Merchant Account

What is merchant account? It is the agreement between a bank (or we say any financial institution) and a business to accept the payment through credit card from its customers.

Advantages of merchant are the low charging fees and instantly available funds. But the payments done through merchant accounts are subjected to income tax.

Types of merchant accounts

Depending on the requirement of your business, different types of merchant accounts are available. These different types of merchant accounts are different from each other as per the business type and rules and regulations associated with the use of that account. Few types are here: like Internet merchant account, high volume merchant account, instant merchant account, ACH merchant account, wireless merchant account, mobile merchant account, and many more. These all merchant accounts differs depending on the type of payment, amount of payment, maximum limit of that account, mode of payment, total time taken for the whole payment, and many more.  In short, type of these merchant accounts varies depending on the need of that particular business.

All these merchant accounts are categorized by the experts into three. 

Retail merchant accounts:  First category is retail, the most popular merchant account type. Businesses like restaurants, hotels and grocery stores usually opt for this. This is actually the face to face payment by swiping the card physically through credit card machine. Card information and signature of cardholder are verified at the spot. This is why retail merchant accounts involve less risk and therefore charge fewer fees. But the rules associated with the retail merchant type are strict.

MOTO merchant accounts: The second category is MOTO, i.e. mail order-telephone order. This category is actually meant for business purposes where payments are done telephonically. In this case the card owner is not present physically to swipe the card to the credit card machine. Card information is fed manually and then verified by confirming customer card information as address, telephone no, zip, etc.  Since in the MOTO merchant accounts, card information is not verified at the spot, and hence requires little more effort for transaction. It charges higher fees for services.

Internet merchant accounts: And the final category is payment through “internet. This category of merchant accounts involves highest risk of fraud and therefore cost slightly more. Payment is made through internet.

Your business is not limited to have just one merchant account. You can have more than one merchant account. Other than the difference in mode of payment, one of the main differences between different merchant types lies in the fees associated with that account type. This fee of creating a particular merchant account depends upon the risk involved with the mode of payment of that specific merchant account.

Nowadays more and more people are opting for credit card for payment. If you are not accepting the credit card but the traditional way of payment, you are surely killing your sale. So, what are you waiting here for? If you don’t have merchant account, open up your merchant account in Power Pay Services to boost your business.

Setup a credit card processing merchant accounts to accept credit cards today!