Online Business Merchant Account Providers – Ecommerce Merchant Accounts – Retail Merchant Account

What is A Merchant Account ?

A Merchant Account Overview for the Everyday Internet Shopper

This merchant account overview is specifically designed to help average internet business owners understand how a merchant account works, and what alternatives exist to owning one for business owners on the internet.

What is a merchant account, and why is it helpful to me as a business owner?

A merchant account is a bank account specifically designed to transfer credit card funds to process payments.  The funds are transferred over the credit card network in a secure manner to pay for items bought in online and offline stores.  Funds are transferred in a number of different ways.

• Manually, through an in-store credit card terminal
  This method of transfer is used for purchases made in person, inside an actual store.

• Manually, through a web paged specifically made to be a terminal for credit card processing
  This method is used for purchased made online when credit card information is directly to the website each time a purchase is made.

• Automatically, through a gateway provider linking directly to an internet-based shopping cart
  This method is used if customers frequently purchase from the same internet provider.  The web-based business will have a shopping cart function that keeps track of credit card information for each customer.

It is important to have a merchant account if you wish to process payments from customers to your business through a credit card service.  Otherwise, your shoppers will have to find alternate means of sending you payments for your goods and services offered.  However, sometimes a merchant account can be hard to obtain for brand new business owners.  In addition, some business owners prefer not to allow direct credit card payments to their company out of fear of compromised security for their customers.  In this case, merchants have to find other means of processing payments for those customers who do choose to pay with a credit or debit card.

What are alternatives to a merchant account?

In the event that you have decided not to use a merchant account for your business, or if you are having trouble obtaining a merchant account to accept credit card payments, there are a few other ways that you can have your payments processed.

• Person-to-Person payment accounts, or p2p.  With p2p accounts, the funds are deposited by the buyer to a common payment service, and then after the service has been rendered or the purchased good has been received, the funds are released to the merchant. Currently, the most common p2p service is PayPal.  In order to make a p2p payment, both parties must have an account with the payment service.  Generally, there are service charges for using this type of payment processing method.
• Third-party payments. A third-party payment system is good for a short-term solution to payment needs.  Fees are significantly higher for a third-party payment system for merchants, but they are easier to obtain than a standard merchant account.

The decision to have a merchant account linked to your website to process internet credit card sales can be the difference between earning residual income with your business and earning a productive living, and should not be taken lightly by business owners. Need to know that a merchant account can support both online and offline business.

Please check out Steps To Apply For Merchant Account and Home Based Business Merchant Account overview here.