Frequently Asked Questions About Merchant Accounts

By Author: arijit
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Today, most customers shy away from paying in cash. Instead, they prefer using Debit or Credit Cards for their online and in-person purchases. Hence, businesses that accept such payment methods, are more likely to enjoy increased sales and improved revenues.
What is a Merchant Account?
A Merchant Account is a specialised Business Bank Account that acts as an intermediary between a business’s Bank Account and the Bank Account of the customer. Moreover, it enables businesspersons to process and accept payment online and in person via Debit and Credit Cards. Hence, such an account acts as an intermediary between the card being swiped and the money being deposited into the Business Account.
It also lets businesses receive the transaction amount immediately and retailers or merchants need not wait for customers to pay their Credit Card bills to receive the payments.
Benefits of Merchant Accounts
As a businessperson, compare different providers and open a suitable Merchant ...
... Account with the necessary documents and details. Such accounts enable you to enjoy the following benefits:

It offers flexibility to your customers when paying for their purchases. Hence, it is likely to increase customer satisfaction.
Since most customers prefer Debit or Credit Card transactions over cash payments, you may witness increased sales and improved revenue flows.
As the authorisation process takes seconds and the money is credited within a couple of business days, it might improve your cash flows.

How does the account work?
Customer can tap their Debit or Credit Card on a Merchant Solution app at a store to pay for their purchases. Similarly, they can also swipe it at the POS machine at a store or use their card online to buy from businesses. However, businesses cannot start accepting card payments online or in person, without opening a Merchant Account. This is because such an account acts as an intermediary and helps in the following manner:

When a customer swipes or pays online using their card, the Merchant Account provider immediately forwards the transaction details to the card issuer of the customer.
The provider then confirms if there are sufficient funds with the card issuer.
Once the funds are confirmed by the issuer, the Merchant Account provider fronts the funds for the business transaction.

Is it different from a payment gateway?
Yes, it is different. A Merchant Account refers to a specialised Bank Account that lets businesspersons accept payment online and in person through Credit or Debit Cards. A payment gateway refers to the technology that processes card transactions for businesses.