What is a merchant account and why do you need one? A merchant account is a certain type of bank account that provides the connection between the merchant, the payment service provider and the acquiring bank. An issuing bank issues a credit or debit card to a cardholder. The card can be used to shop online. With each purchase, a payment request is sent to the acquiring bank through a payment gateway. The acquiring bank then sends the request through the relevant the card scheme back to the issuing bank for authorisation.
When authorised, the merchant can deliver. You need a merchant account because it enables you to legally accept and process online payments through all online payment methods. The benefits of having a merchant account? Provide safe payment options to your customers, protect their sensitive data and protect yourself from fraudulent transactions and chargebacks. Merchant account holders are required to abide by the rules and regulations as set by the card schemes MasterCard and Visa. Fees for getting connected and processing payments differ greatly per payment service provider.
Compare before committing to one! Before getting connected to a payment gateway, your application will go through the boarding process. This will take a couple of days. The payment service provider needs time to: screen your company, run a risk analysis and to fully prepare the paperwork to get you connected. If you would like to know more about online payments and payment gateways, please keep your eyes peeled for upcoming videos.
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