5 unknown things about merchant account

5 unknown things about merchant account

What do you know about this type of account?
Currently, the term “merchant account” means a legal agreement concluded between two parties:
• The processor.
• The trader – merchant.
The form of existence of this agreement is a special bank account. It enables you to perform the following operations:
• Reception of financial transfers.
• Processing received payments.
In order for the account to correspond to the category “merchant”, all transactions should be carried out using credit or debit cards. Also merchant account can be used for other types of transfers and financial transactions (for example, pay bills).
But, in addition to the details described above, there are additional aspects that are also important for understanding the nature of the merchant account (regardless of whether you are doing business offline or online).
5 Positive Aspects of Merchant Accounts
• It can be opened simultaneously in several financial institutions. Most of the banks welcome such an action, as this increases their incomes. In some cases, the management of the financial institution helps the client in finding the optimal gateway for payments. But it is necessary to remember that in this case the client undertakes to link the usual account with the new one. This is due to the inability to store funds in a new account, and the need for periodic transfer of money to a personal business account. The duration of the merchant account setup is two to three days. But, if the client has chosen for a place of its registration a large financial institution (and in case of registration of a new enterprise), the term can increase up to 21 days.
• The procedure for connecting a merchant account is a complex task. This is due to the restriction of business activities that are allowed to this procedure. common obstacles that can become in the way of connecting merchant accounts are a negative history of entrepreneurial activity, the distribution of goods from the high-risk group (gambling, auctions, dietary supplements, immoral resources, etc.). But the main reason for refusing to register a merchant account is the negative reputation of the company. That is why the checking financial institution conducts an obligatory check of credit risk assessment. Only after passing this procedure and issuing an approving verdict the company gets access to the trading account.
• To connect an  account, you must enter into a contract with the provider. The provider of Internet traffic and the owner of the trading account are required to agree on certain details (term of the agreement, nuances of early termination of the account, registration with other suppliers of trading accounts). These aspects are necessarily specified in the binding contract, which is signed by both parties to the agreement.
• There is no identical level of service for accounts of the owner of the trading account (the full account of the distributor is not provided by processors of small-scale business objects). This consists in the impossibility of obtaining certain functions when there is the possibility of processing payments coming to credit and debit cards. If you are a small business owner, registration of a trading account is not required. But with the development of the company, there will be a need for a more stable service provider with absolute security and a complete list of required functions.
• Possession and maintenance of trading accounts is expensive. The amount of fees levied by providers is determined independently by the provider of Internet traffic. Payment of fees – monthly or annual (the frequency of payment of fees is determined based on their types).

There are several groups of fees:
• Payment of the application. Certain providers take a lot of money for this operation.
• Support for the operation of the account and authorization fees (the latter is withdrawn each time a payment is received to the account, even if the transaction is not approved).
• Processing rates (discount). The fee is withdrawn exclusively for approved payments, in the form of a certain percentage of sales.
• Fees for compliance with data security standards in the payment card (PSI DSS).
• Monthly fees. The fee is withdrawn when the account holder does not meet the minimum requirements for processing monthly transactions. In most cases, only the difference between the minimum monthly amount and actual processing costs is paid.
• Chargebacks. This type of fees is withdrawn in the event of a payment stop by the processor and a refund to the buyer. With technical errors or due to orders that have been returned to the client, certain failures may occur.
• Registration fees. Each month (at the end) is taken when the supplier sends the application to the seller.
This is a complete list of monthly business processes and fees. Expensive punishment is a long-term termination. It is realized when the owner of the merchant account has decided to terminate his agreement earlier than the agreed term.
Conclusions
• Registration of trading accounts is a key task for stores (online and physical).
• If you want to manage an enterprise of any kind and accept credit or debit cards, opening a trading account is a priority.
Therefore, the business owner must choose the most efficient supplier of trading accounts. At the same time, low interest rates should not be considered an advantage. A key attribute of a quality supplier of merchant accounts is an excellent general service.