A merchant account is a type of bank account that allows businesses to accept payment in multiple ways. Normally through debit cards and credit cards. An acceptor and a merchant acquiring bank agree on the creation of this account for settling payments through card transactions. In certain circumstances, the payment processor, independent sales organization or even member service provider can be a party to the merchant agreement. The merchant is obliged to abide by the regulations formed by the card associations no matter if he was part of the agreement through an acquiring bank or aggregator or directly.
There are various methods for processing credit cards. In the recent days, the payments are made electronically to the merchant’s banks for authorization, capturing and depositing. The cards have a magnetic strip that can be read when the card is swiped through a credit card terminal reader. A computer chip is read and the other method is the manual entering of credit card information to the computer or website. The most ancient methods that involved the submission of credit card slips to merchant processing banks through email or through accessing the Automated Response Unit using telephone are still in use now.
The ancient methods utilized a two part form and a manual device to imprint the information on the forms mechanically. A credit card terminal is an electronic equipment that is stand alone and it enables a merchant to either swipe or manually enters any information. These electronic equipment are usually connected to a point of sales system with network connection and keypad. In addition, they also have printers that are built in. the Automated Response Unit works by authorizing entered information over a cellphone or landline telephone. This method ensures that the merchant imprints their card with and imprinter thus the creation of a customer receipt and a copy for the merchant and more here. The next step is the processing of the transaction over a phone.
For electronic businesses and online retailers, they utilize the payment gateway that authorizes their payments. It has similarities to the point of sale terminal which is situated in most retail outlets. Merchant account providers tend to have their own gateways for payment. The gateway usually has two components, the virtual terminal and the websites shopping cart which is connected through and API to a gateway. This kind of connection allows for processing in real time from the merchant’s website.
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