A
merchant account is a bank a/c designed to accept credit card payments. The
options that you offer to your customers through this option are many. They can
pay using a credit card terminal or through a shopping cart available in your
company's web page. As a business owner, for accepting payments, you will need
a merchant account.
What must you know?
The
following points will assist you to understand the facts associated with this
account and processing.
1. What are high-risk businesses? It
includes
- Adult services providers
- Online gaming business
- Casinos and similar lines of business
2.
You might find it hard to get a merchant
account. It is because of the risks of frauds involved with the high turn-over.
3.
The result is that banks stay away from
providing Internet accounts to merchants. They do it to keep away from probable
chances of fraudulence. Thus you have to turn to private institutions offering
merchant account services.
4. After acquiring a merchant account, you
will need a payment gateway account. It is the processing account, which
verifies the authenticity of the used credit card. After that, it then
transfers the funds to your merchant account. This is high risk payment processing.
How does it work real-time?
1.
The customer inputs his credit card info
on your payment gateway web page. Also, it must be a secure web page. It means
the page must be encrypted so that it remains inaccessible to any third party.
This is mandatory to reduce frauds.
2.
Next, the shopping cart application then
collects the information. It transmits it to the credit processor - the payment
gateway. The processor validates the information and determines the company
that manages the customer's credit card. Once authenticated, it then transmits
the billing request.
3.
With the receiving of the request, it
then sends back an acknowledgment to the payment gateway. If the information is
authentic, it initiates the fund transfer to your account.
4.
The merchant account collects the funds
for a specified time. Then it transfers the amount to your account associated
with the payment gateway.
Third Party Providers - What you must
know?
Since
there is hardly any chance that you can connect with a bank, the following
pieces of info will thus be of much importance to you.
1.
Processing fees for third party merchant
account providers are higher than traditional ones
2.
It works in the same way for both
merchant and third party accounts. The difference is, instead of paying to the
merchant's website, they pay on the third-party processor's website. The rest
of the high risk payment processing works the same way.
Finally,
It
is the only thing that can give you increased sales. Once your customers can
pay with the means they want, they will want to come back and use your
services.
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