May 11, 2010
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Meeting Business Needs With CC Payment Processing, Pt.4
Choosing the right merchant account.Whether you run an internet business or a store front retail business, to remain competitive in today's market, you need to offer your customers a variety of payment options. If you want to take your business to the next level, you'll want to assure that the debit and credit card payment processing company is secure and safe. You may have already begun checking out debit and credit card payment processing company, however, you might not be aware that you'll also need an efficient credit merchant account to act as the connection between you and the debit or credit card processing company. The credit merchant account enables you to accept debit or credit card transactions via your own website.
Merchant accounts are different from bank accounts, unlike a traditional bank account, credit merchant accounts allow businesses to accept debit or credit card payments. Banks can set up a merchant account as well as a debit and credit card payment processing company. These accounts have rules that define how the product will be bought, sold and paid for. It is considered fraud if any of the rules are broken. When a merchant applies for a merchant account, the application process involves and Independent Service Organization (ISO) which also acts as an underwriter. The ISO examines the application and determines if the extent of the risk involved. It will either approve or deny services. Merchants must adhere to all the rules or risk having the payment processing services shut down.
Two different types of credit merchant accounts exist; "Over-the-counter" (OTC) and "money-order/telephone-order" (MOTO). Typically retailers use OTC merchant accounts which typically have lower fees and credit card transactions fees because customers are usually physically present. Internet based businesses typically use the MOTO services. Since internet sales require more steps, MOTO accounts cost more because after the card information is entered, the information is verified and the money placed in a 30 day holding place before the card is actually charged. transactions require more steps a two steps instead of one. Once all of the card information is entered, the data is verified and then the money is subtracted from the cardholder's limit and placed in a 30-day holding account until the product is shipped. Upon shipment, the money is transferred to the merchant.