E-Commerce Exchange on How Merchant Accounts Work
A business owner who needs a merchant account will be able to obtain one from a company that represents the credit card issuers. In order to set up these business accounts, both the merchant and the credit card payment processor will need to draw up a contract detailing the services that the processor will provide and for what price. Then, the merchants will be able to accept credit cards as payment in their businesses.
Business owners can only accept Visa, MasterCard, Discover or American Express if they have a merchant account. Only banks that have a relationship with Visa and MasterCard can set up these accounts because these banks have obtained the certification necessary in order to offer the services that business owners need to accept credit cards as payment. After business owners have purchased their merchant accounts and they are authorized to begin accepting credit cards, they will be able to begin allowing their customers to pay by credit card as described below.An Example
1) As customers begin to pay for their merchandise, they swipe their cards on the store’s terminal or they enter their card’s information where it is stored in the software.
2) The sales associate electronically asks for permission (more…)