When you decide to choose a credit card merchant account, you will need to know about the different types of accounts which are available to you. This will help you find a merchant account that is suitable to your needs. Many merchants will set out to look for the most cost-effective account, and end up with accounts which don’t fit them.
A retail/swiped account might offer you lower rates, but if the account requirements are not met, you might end up paying surcharges, additional fees and even penalties.
There are three accounts which are offered to merchants. These are:
1. A retail/card swiped account which is meant to be used by retail businesses, which can swipe the card through an electronic card reader. This will prove that the card was presented. This type of account is appropriate for you if you meet your customers physically and are able to electronically swipe the card in 90% or more of your transactions.
2. A retail/keyed entry account is supposed to be used in a situation where the card is presented, but can’t be swiped electronically. The card number will be entered into the physical terminal and you will get a manual imprint of the card. A higher transaction rate will need to be paid for this type of account. It is most fitting for mobile merchants who usually swipe under 90% of their transactions.
3. Mail order/telephone order/Internet accounts are appropriate for merchants who don’t usually see their customers and have to supply for a lot of recurring payments. They can’t swipe the card physically at a terminal or take an imprint of it. A virtual terminal will be needed in order to make keyed transactions. Due to the higher risk level, the transaction rates will be higher.
The Internet accounts also necessitate the merchants to follow a certain format when they are looking for credit card payments. Amidst other information, the payment form must contain the name of card holder, the card number, expiry date along with the billing address. All these need to be used in order to verify if the card holder is genuine or not.
Many kinds of fees are linked to an Internet merchant account. Application fees may be asked for up front when you decide to apply for an account. A monthly statement fee is another fee which is charged by some service providers. In this case of course, there is the transaction fee which will be negotiable which depends on the volume of transactions promised. There may even be a fee for termination.
Consequently, it is important to compare the many different plans and fees, before you make your final choice for a merchant account.
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