What is a merchant account and why do I need it to accept credit cards on my website?

[Propeller]

If you are new to ecommerce or to online business in general you will most often quickly ran into a lot of questions while it comes to payments for your services and products, now the first thing you might do is to make a search on google or similar search engines, and believe me you will quickly end up with more questions then before you made the reasearch.

The most commong terms when it comes to credit card processing and to accept payments on your webiste are the following:

Merchant Account
Payment Gateway
3rd Party Payment Processor
Underwritter
ISO
MSP
Acquiring bank
e-wallets

Now when you start to look into accepting payments on your webiste you will also quickly find yourself lost when it comes to the question, which payment methods do I need to accept on my website, the quick answer is, Visa nd MasterCard are the most common next to PayPal...

Now I found a great guide which will explain you the questions addressed above. What you need to know about Ecommerce 2009 - TopTenREVIEWS

Another important thing is that once you have found out what exactly you need, you will have a look at which payment processors and banks are reliable and able to help you not just with the merchant account but also with the integration of the payment gateway to your website.

But first, research very well each and every company you find on the net, look for reviews of each payment processor and lookup the domain on google, that will bring you bad / good results if any.

Another good webiste is this one Credit Card Processing Review 2009 - TopTenREVIEWS they have made a great review of the many available payment processors around.

[SysOp]

Thank you for publishing this here in the forum, might be very helpful for many of the new people who just entered into the e-commerce world and who need to accept payments on a website.

Also it is the most informative movie I have seen about credit card processing in general.

[chipchip]

Thank you for sharing this information, very helpful....

[bizman]

Great thread, thank you for sharing, hope it will help the many seeking a merchant account or credit card processing.

[Mer-chant-now]

Very interesting post. Keep them coming if you should any additional information.

[Propeller]

Thank you guys, I had already forgot about this thread.

You can find many good articles about merchant accounts, payment processing etc. here Accept Credit Card Payments | Merchant Account | Payment Gateway if you like.

Here is one about the basic...

Do I need a Merchant Account?
When you start your business online and you start to get the first requests from your customers that they want to pay by credit card, you will quickly meet the term Merchant Account, if you look around for instant on Google for payment service providers or credit card processing, many companies will tell you that you have to open a Merchant Account with one of their Acquiring Banks.

So what is a merchant account, please explain, often people connect a merchant account with a regular bank account which isn’t obvious but simply a confusion in the terms. A Merchant account is opened by an Acquiring bank, which is authorized by the card association to process payments by credit card for Online Merchants. In many countries you will need to contact another company (Payment Service Provider, ISO or MSP) which on behalf of the Acquiring bank will open the Merchant Account for you. Often you need to sign a Credit Card acceptance contract both with the Acquiring Bank and the Payment Service Provider, to become a Merchant Account.

When you open a Merchant Account you will also need to know which credit cards you will and need to accept on your web site. The major credit cards are Visa and MasterCard, then comes Amex, Diners, JCB and the rest. Many countries have also country specific credit and debit cards for which you need a separated merchant account or merchant agreement. A Merchant Account can be opened by any business which sells products and services and which to accept credit cards, this is the case for both online and Offline business. However, not all business industries can become a Merchant Account or Merchant Agreement, some business types are simply not accepted by the card association.

An important thing to know when you consider opening a Merchant Account is that you will be held responsible for each and every transaction made on your web site. When you open a Merchant Account with an Acquiring Bank you will sign an agreement where you will find the clausal, that you will be pay the bank any losses they might have on your business, that you as the Merchant and the Merchant Account holder will not sell any other products or services then what you listed in the Merchant Agreement. Also that if your merchant account is facing excessive chargeback’s that it simply will be terminated and that you will be subject for fines. Often we suggest clients looking for a Merchant Account, to make a good business description of what they are going to sell and how they will do it. This helps both the bank and the payment service provider in finding the right solution for you. A Merchant Account isn’t the right solution for anyone, but if you are doing well with your business and you learn how to protect you from fraud, then a Merchant Account can be less expensive and more agile compared to any other solution.

CCLOGIC LLC has more than 10 years of experience in the field of Credit Card Processing; we have been in the marked from almost the beginning and know very well the traps, the good ones and the bad ones. We work as consultancies for businesses looking for a reliable and secure solution for their Merchant Account and credit card processing needs. We both work with regular e-commerce and high risk considered businesses.

source: Merchant Account | Credit Card Processing | Payment Gateway | Accept Credit Card Payments