A Merchant Account is what allows your company to accept credit cards.
All businesses who accept credit cards have a merchant account.
Here is the process:
A business must sign up for a merchant account thru a Merchant Service Provider.
A Merchant Service Provider will require some information from your business to set up your merchant account.
The Merchant Service Provider will assign rates and structures based on the type of business you run and the types of transactions you will be running.
A restaurant is different than a hardware store, so be aware of rates types that you will be charged.
Here are a few things that a Merchant Service Provider will need from you to set up a
Merchant Account:
Applicant and/or Personal Credit Score
Bank Account
Type of Business
Card Acceptance Method (Merchant Type)
Monthly Volume & Average Sales Ticket
Business’ Financial Condition
Business Longevity
Return/Refund Policies
Processing Rates & Fees:
There are various fees associated with having a merchant account. These could vary, depending on the type and company providing the service. Here is a summary.
Interchange: is what Visa®, Master Card® charge you per transaction. Everyone pays the interchange rate.
Plus or Discount Rate:
Plus or Discount Rate is the added percentage charge discounted from your transaction, depending on the type of card used, if customer present etc.. There are more than 300+ different plus rates as set by Visa®, Master card®.
Discount Rates:
All transactions processed are classified into 1 of 3 qualification levels.
Each sale rate level is determined by the type of card used, and/or how it is accepted and processed.
Qualified
Mid-Qualified
Non-Qualified
Transaction or Authorization Fee: This fee is charged for each electronic authorization request and transaction made, including all approved and declined sales, returns, voids, and batch settlements.
Processing Capability Systems:
To process credit card payments, processing equipment or software is required to capture card information, make authorization requests, and close sales. Depending on business needs, equipment options include:
Credit Card Terminals:
Wireless Credit Card Terminals,
Contactless Terminals
Stand-Alone and Terminal/Printer Combination units
Internet Gateway Solutions: Virtual Terminal or eCommerce
PC Software: Stand-alone or integrated into other business systems.
