What is a Merchant Account?
Merchant account is a term that gets thrown around a lot these days, especially when it comes to dealing with digital aspects of your business and sales, but what is it exactly? A merchant account is special bank account type that lets businesses accept payments by credit cards, debit cards, or sometimes gift cards. This type of account is implemented under an agreement between the business sand a financial institution and is used for accepting payment transactions that use something other than cash.
Today there are various methods that exist for presenting the card information to the system to finalize the sale. In all circumstances the information contained on the card is entered into the system to begin initiating the payment process. The magnetic strip on the card can be swiped and the information gathered that way or the information printed on the card can be manually typed in. The first forms of credit card use made an imprint of the credit card information on carbon paper and the information was then entered manually. Today's merchant accounts allow for a much faster and easier transaction, whether it is at a store credit card terminal or on online digital payment processing.
A credit card terminal is a specially designed piece of equipment that is designed to take credit and debit car payments for purchases made at the store. When you buy groceries and slide your card through the reader at the check out counter, that is a stand alone terminal and was one of the first systems used by merchant account providers. When a credit card and its information is processed through the terminal, it contacts the merchant account network to check and see if the funds are available and the information entered is correct. If all checks out the payment is processed and the fees are charged to card's account. They all have had the same general look and design since they first started to become popular in the 1980s. Like computers, there are any options available when it comes to the amount of of memory and other capabilities and functions that the terminals can do. A lot of it is also dependent on the merchant account provider and what they require for their services.
As the digital age continues to take over more traditional styles of buying, the merchant account and payment processes have also changed. A payment gateway is a payment service that is sued by digital and e-commerce businessmen and allowed payments for e-businesses and those that conduct their business and make their money online. It is the equivalent off the card reader systems that you use in a store but is set up to handle online transactions. The gateway system for merchant accounts usually contains a virtual terminal that lets the buyer enter credit card information in manually over a secure server, and then the website's shopping-cart that handles the processing and shipping and gives the buyer a chance to see everything that is being bought and charged. This is the new way that merchant account services are being used today; credit card terminals are still widely used but online transactions are becoming more and more common.
About Sarah Jo Lorenz
I am a very passionate individual who has many loves that I share with others. I have been writing all my life and have been working in the writing field for over 12 years. Get ready for some fun!