A merchant account is a contract between an acquiring bank and a merchant under which an acquiring bank extends a line of credit to a merchant, who wishes to accept payment through a credit card transaction. Without such a contract merchants cannot accept credit card payments by any of the major credit card brands.
Why Do I need one?
A merchant account gives you the ability to accept credit cards and debit cards as payment for your goods and services. Having the ability to accept credit/debit cards provides your clients with an extremely popular and easy payment option, beyond cash and checks.
Studies have shown that merchants can typically increase their business by 30 – 70% by just accepting credit/debit cards as a form of payment. Clients are also more willing to purchase higher cost goods and spend more money when they are using a payment method that offers them repayment flexibility.
Without the ability to perform electronic transactions through a merchant account online and e-commerce businesses have no way to receive fast guaranteed payments from the clients.
There are 3 basic types of merchant accounts:
Retail (brick and mortar)
Moto (Mail Order Telephone Order)
E-Commerce (online internet sales)
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