An Internet merchant account is one of the absolute essentials in accepting payment for online transactions. The most important thing to remember about an Internet merchant account is that it is separate from a regular merchant credit card account.
Don’t make the mistake of assuming that this service is included in your Internet merchant account with a bank. It is a separate? But necessary? Service. “The merchants think the fee is part of the bank fee, but these process is separate from the banks.”
Accepting credit card payments through your web site actually requires multiple components. Between a paying customer and your bank account, three layers exist:
Payment Gateway – This is the code that will transmit a customer’s order to and from an Internet merchant account provider. The payment gateway provides you the ability to accept customer billing information (credit card number, credit card type, expiration date, and payment amount) and the necessary validation steps that must be followed before the credit card is actually billed.
Internet Merchant Account – A Merchant Account is an account with a financial institution or bank, which enables you to accept credit card payments from your clients. The payment gateway actually transmits the billing information to the Internet merchant account provider. Unfortunately, most local banks do not provide Internet merchant account capability.The main reason why most local financial institutions or banks do not want to provide online merchant accounts is because transactions conducted over the Internet are totally different from face to face transactions where a signature is required to authorize the purchase. This makes online transactions prone to credit card fraud. Fraud protection should be one of your primary considerations when choosing an Internet merchant account provider.
Web Site – Regardless of which merchant provider and gateway service you choose, your web site will need to integrate with your service providers. Most providers include detailed web integration instructions. The ability to accept credit cards is essential to site success.
But setting up a traditional merchant account with Master Card, Visa, Discover and other plastic payment methods is pricey. There are set up fees, maintenance fees, gateway fees, and a percentage of each sale goes to the merchant account provider. This is typically too much for the small site owner to absorb.