What is a Merchant Account?

What is a Merchant Account?

What is a Merchant Account? A Merchant Account is a special type of bank account. But what really is a merchant account?

merchant servicesThis bank account allows you to accept credit card payments and be paid into the special bank account that is known as your “Merchant Account.” The credit card transactions passed through your website and payment gateway end up as money in your merchant account.

Why is a Merchant Account Used?

Having a Merchant Account is a cost effective method of taking payments from credit cards. There are other ways. But, put simply, once you have a merchant account and a payment gateway, you will be able to accept credit cards in your site. More importantly you will then receive payments due to you.

How Do Merchant Accounts Work?

Getting the money from your customers credit card and into your merchant account takes multiple steps. We reckon there are about 9 steps for you to get paid.

  1. Your customer purchases a product from your website
  2. You send a request for the credit card to be authorized to your payment gateway provider
  3. Your payment gate sends the request to the credit card network such as Visa, MasterCard or some other credit card.
  4. The bank that provided the credit card to your customer replies back to the credit card network.
  5. If the reply to the authorization request is OK then, you ship the product to your customer.
  6. When you ship the product to the customer you will also do a “capture” or “charge” the customer’s credit card. The “capture” or “charge” request follows the same path as the authorization request.
  7. The money is charged to the customer’s credit card.
  8. The bank that provided the credit card to your customer pays your money into your merchant account in about 2 days. Sometimes this can take longer depending upon your how your merchant account provider views you and your business. If you are a high risk merchant, for example, this process can take longer.
  9. You can withdrawal your money and use it however you wish.

So that’s why you need a merchant account. There are alternatives to merchant accounts and we will talk about those as well in a later post.

[schema type=”review” url=”https://wyzemerchant.com/” name=”What is a Merchant Account” description=”What is a merchant account. Why do you need a merchant account to take payments from credit cards. What are the steps in getting paid by your merchant account provider?” rev_name=”Merchant Accounts” rev_body=”Merchant Account” author=”Brandi” pubdate=”2015-11-03″ ]
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