Merchant Accounts For People With A Preference For Credit Or Debit Cards

Business people who have a preference for credit or debit cards over cash as a method of payment should always consider opening a merchant account

. This type of account has many advantages as compared to ordinary current accounts. The charges, to begin with, are relatively lower because they are well designed to cater for the needs of the two parties that are carrying out a transaction. The merchant bank collaborates with the credit card issuer to ensure that payment gets to the seller in good time.

In the merchant accounts, the credit cards are processed electronically. The card is fed into the automated machine, which records the information on the magnetic strip of the card. This method has overtaken the old ways whereby information used to be passed on via telephone. As such, cases of fraud and credit card theft have been dealt with and are on the decrease, making merchant accounts safer and more reliable. The whole process of information exchange is enabled through a credit card terminal, which is an electronic piece of metallic chip.

However, for it to function, it must be connected to a power supply source and a telephone line. The terminal enables the system network to verify whether the card can be used or not. If the card is usable, the transaction is recorded on the machine, which then transfers the funds indicated on the credit or the debit card to the merchant account number indicated. A credit card terminal is not complete without a keypad, printer, modem and memory card. All these devices comprise the automated response unit, which helps to keep track of the transaction process between the merchant account, the credit card issuer and the payment processor.

The chances of misunderstanding arising from any of the three parties are reduced greatly. Merchant accounts have become popularized through strategic marketing that is being carried out by banks and by other sponsored and authorized bank agents. Both of these must have a healthy working relationship with credit card or debit card issuers like Visa and Mastercard. Such banks have the mandate to directly provide merchant accounts to their customers who may wish to open one.

The rates and fees chargeable on the merchant accounts are quite affordable. They are determined on the basis of the type of services required by the account holder. Some are payable on a regular basis, while others are charged per item and at a given percentage of the total value. Discounts may be offered, but this is dependent on network charges and other dues. The methods of arriving at discounts are varied and the merchant account providers choose which one suit them best.

Merchant Accounts For People With A Preference For Credit Or Debit Cards

By: Peter Gitundu

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