Merchant
Account is an industry term meaning a banking relationship
which allows a business to accept credit cards. Existing businesses that
already have an established Merchant Account with the Bank need to make
sure the same Merchant Account is acceptable for Internet Transactions
and also find out the gateways the bank works with. Smaller businesses
that have not yet established the banking relationships necessary to
accept credit cards need to do so.
There
are primarily two methods -
To have your existing
bank setup a merchant account for you: This usually can be
cumbersome especially if the business is very new. This often
involves a lot of paperwork and may require a substantial deposit
with the bank.
Merchant Account Providers: HyperLink
Host works with Merchant Account
Providers who will provide you a merchant account for a monthly fee.
They are usually faster in setting up accounts as the paperwork and
processing is much less. In addition security is generally handled
by the Merchant Account Provider. Certain factors need to be taken
into account however. Among them are:
Rolling Reserve - between 8-10% of your revenue will be held
back for a period of six months. This is instead of the
initial deposit requested by the banks.
Credit Card Info. - In some cases you will not be allowed to
capture credit card info. All credit card info will be
handled by the Provider. This in some ways is actually useful
as you do not have to worry about the security aspect for the
cards. The security aspect is handled by the Providers
directly. In addition they have fraud prevention software in
place that will reduce false transactions for your business.
