Online Merchant Account
With the advent of Internet and e-commerce, the concept of online transactions is gradually gaining increasing popularity. In case you own an e-commerce site or perform online business transactions, you will need an online or Internet merchant account.
An Internet merchant account is essential, if you want to accept payments for online transactions. However, it is necessary to keep in mind that an Internet or online merchant account is different from a normal credit card merchant account.
Many people have the misconception that if you own a credit card merchant account with a bank, it will also include the services of an Internet merchant account and vice versa. Moreover, many merchants also believe that the fee paid for an Internet merchant account is a part of the bank fee.
You will need to understand the differences between normal credit card merchant account and Internet merchant account. The latter requires several components for credit card processing and payments through your website. Furthermore, there are three layers that exist between a paying customer and your bank account.
The three important components of online merchant account:
Payment Gateway: It is actually a code that helps you to transmit your client’s order to and from a registered Internet merchant account provider. It also allows you to obtain and accept the billing information of your customer.
This information includes credit card type, expiration date of the credit card, credit card number, payment amount and the other details of credit card processing. The payment gateway is an essential validation step that you need to follow before actually billing the credit card.
Internet Merchant Account: It is an account that you need to open with a bank or financial institution offering such services. Without this account you cannot accept credit card payments from your clients.
Through the payment gateway, all the billing information is transmitted to your Internet merchant account provider. However, majority of the banks fail to provide Internet merchant account services. One of the main reasons is that online transactions differ from credit card merchant account services where a signature is necessary to approve the purchase.
One thing you need to consider, while selecting an Internet merchant account provider is that these transactions are prone to credit card fraud. Therefore you need to take the necessary fraud protection steps, in order to save your business from online hackers.
Web site: You need to integrate your website with your Internet merchant account service provider. Majority of the providers have detailed web integration instructions for your benefit.
You need to keep in mind that these online merchant accounts are often more expensive than normal credit card merchant accounts. They include set up fees, gateway fees, maintenance fees and you will also have to pay a certain percentage of each sale to your service provider.
