Merchant account payment processing
What is a merchant account?
The concept of a merchant account is all about online payments processing. The process of opening it involves the registration of an account for a legal entity in a banking institution to accept payments from Mastercard, Visa, and other payment systems.
Merchant accounts allow for online payments processing, i.e. receiving the funds after a purchaser has paid and their data has been processed by the payment system.
Funds that are debited from users go through the processing center and then move to a merchant account. Within 1-2 days the received funds are usually transferred to the company's bank account.
What is merchant account payment processing?
By opening a merchant account, the bank empowers you to withdraw money from your customers' bank cards. After simple actions on your part, the money from the client's card is transferred to your merchant account in the acquiring bank. After a certain amount is accumulated, the funds are transferred to the company's bank account.
According to the rules of Visa and Mastercard, the merchant's bank (which provided the service) bears full responsibility for the chargebacks. In fact, the bank gives you a tool that allows you to withdraw money from clients' cards in an unlimited amount, relying on your honesty. It means your bank bears responsibility for any unreasonable withdrawal of money made by you.
The procedure of opening a merchant account is strict and has its rules. Your business must have some processing and chargebacks history - this allows the bank to gain some insights into you and your company. If there is no payment processing history, as often happens, then it must be developed.
To open it, you need to carefully analyse your business model and select the optimal jurisdiction for doing business. A merchant account is opened exclusively for a legal entity that meets a number of requirements.
Merchant payment services options
To get the best deal for your business, you can choose among several options of merchant payment services. Generally, they differentiate two main types of merchant accounts: trading and online accounts. The difference between them lies in the presence or absence of a bank card at the time of payment.
Trading merchant account
It is used when purchasers pay with the provision of a card, the information from which is read by special equipment (POS-terminals or imprinter). These are mostly used in regular stores.
Online merchant account
This type is used when clients make payments remotely. They simply enter the information about the card and the payment being made into a special payment form, after which the money is debited from their account and redirected to the company's one. These merchant accounts are used in all types of e-commerce, on sites that provide various services. For example, this type of account is in demand by web stores, forex brokers, cryptocurrency exchanges, interactive casinos, dating sites, online games, and investment companies. This type of merchant account is used most often.
Benefits of having a merchant account
It is quite difficult to imagine an online business or marketplace without a merchant account. Having one is the key to the global consumer’s market and sales. Merchant accounts allow businesses to accept payments around the clock from around the world, regardless of the working hours of the banking institution. Customers can pay at night, on a public holiday, and still, it will be processed promptly and on time.
Here’s the list of benefits for business:
- Simplicity and speed of payments.
- Independence of selling from the bank working hours and weekends.
- Possibility for clients from different continents to pay for products online and receive them by mail.
- Empowers businesses to accept payments for its products or services from anywhere in the world.
- Transferring funds to a merchant account for a buyer is in most cases cheaper than the cost of a bank transfer.
- Opportunity for merchants to monitor the information about all the transactions, control the dynamics of sales, and transform it into reports.
- Modern security technologies that meet the current international requirements: two-factor authentication, Mastercard SecureCode, and Verified by Visa technologies.
- If your bank provides multicurrency processing, no conversion is carried out when a transaction comes from another country. It means that the merchant account owner does not need to pay any additional commissions.
How Corefy can help
Payment orchestration platform Corefy is ready to assist merchants with opening merchant accounts to start accepting and processing payments from their customers online. Contact our sales department to find out how we can help.
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