Merchant Vs. Vendor Accounts

Although many merchants have found individual companies to provide services that

they need to enter the ever growing market online, there is still much more to do. The most intelligent resolution to this problem is to use one provider to resource all of these services into one solution. A provider that offers the security, reliability, partnership option, and a superior payment gateway will narrow all these issues into one packaged solution.

A Merchant account is a line of credit extended by an acquiring bank to allow a merchant to process credit card transactions and without such account one can not accept card transactions by any major credit card. These providers statistically work with larger volume clients. And these providers typically are a separate company than the gateway providers.

A Vendor account is a line of credit extended by an acquiring bank but, is set up through a certified payment provider and then onto the vendor. So the payment provider takes care of the bank details to fit the vendor. These providers statistically work with small to medium sized businesses. The vendor in this case is in fact a merchant but referred to as a vendor.

Some of the services that you should look for:

Superior Security practices

Chargeback guarantee

Merchant account required or Vendor account

Multiple payment options

Rapid account processing

Superior Risk Management

Multiple Partnership packages

Services such as these are offered by reputable payment providers such as Gate2Shop, they provide highly secure risk and fraud protection service and they provide the payment gateway. While setting up the individual vendor accounts all of the compliance checks are made by the provider and investigated by the risk specialists. The risk department decides whether the vendor will fill the companies business model and either decline or accept the vendor. Then the account is opened through the payment provider for these accounts. Operating in this fashion relieves the vendor from having to deal with the banking details and conditions.

More and more of the providers as such, are evolving into complete Payment Service Providers. And the differences in these business models have allowed a margin to grow between competitors. These payment providers are already certified and comply to the Payment Card Industry requirements and working relationships with the acquiring banks needed to offer the payment method options. Without having multiple payment options as the major credit card providers and major currencies to offer, a payment provider can not pass these on to the vendors as a solution. With the services provided it gives businesses more options to select a provider and the preferences for the accounts.

by: Lachezar Georgiev

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