Merchant Accounts -- Do Your Research

A merchant account allows a business to accept credit cards, debit cards, gift cards and other forms of electronic payment. This is also widely known as payment processing or credit card processing.

A merchant, a business owner who receives payment for their goods or services, must apply for a merchant account. The merchant account may be or may not be established based on several factors of which risk is the most important. Merchants who own businesses with no credit and have poor credit may find it difficult to establish a merchant account.

For a credit card transaction to be processed correctly it must be sent electronically to an acquiring bank. The method of processing credit cards will vary by industry. A merchant account provider typically has the ability to sell or establish a means to process credit cards for a merchant.

A credit card terminal is a stand alone piece of electronic equipment that allows a merchant to swipe or key enter a credit card's information as well as additional information required to process a credit card transaction. A credit card terminal is a dedicated piece of equipment that only processes credit cards although it is common for related transactions including gift cards and check verification to also be performed. A credit card terminal typically requires to be plugged in to a power supply and communicated over a telephone line. However, newer terminals may be powered by batteries and communicate wirelessly or over the Internet. Some credit card terminals are connected to satellite dishes and communicate wirelessly instead of through a phone line. When a credit card is run through, it dials out to verify if a credit card can be charged to. The actual billing of the charge is done at the End of Day batch, where all sales from the terminal of the day are sent out.

For automatic online credit card processing a terminal is not needed. In this case a payment gateway is used. There are many sources for these.

A payment gateway is an e-commerce service that authorizes payments for e-businesses and online retailers. It is the equivalent of a physical POS (Point-of-sale) terminal located in most retail outlets. A merchant account provider is typically a separate company from the payment gateway, but normally has the ability to provide payment gateways to their customers. Some companies can provide both a gateway as well as a merchant account. (Wikipedia)

There are many options for online merchant accounts. Do your research here and apply for the best account for your situation.

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