Merchant Accounts: Various Types.
Merchant account is
the account opened through a bank that is a member of the Visa,
MasterCard, or other credit card network which allows merchants
to accept credit cards from purchasers.
Retail Merchants are the consumer that goes to merchant's
place of business, chooses goods and/or services, and gives the
merchant his/her credit card for credit card authorization.
Merchant swipes the card on the credit card processing terminal
and the credit card machine dials the acquiring processor for
credit card authentication. Acquiring processor sends credit
card transaction to card association, which in turn sends the
request for credit card authorization to the issuing bank.
Issuing bank accepts or declines the credit card transaction and
sends message to the card association. The card association
contacts the credit card processor with the credit card
authorization, and then the request to deliver goods and
services is given to the merchant by way of the POS terminal.
Merchant sends the credit card processing company fulfillment
notification to permit settlement meaning that the goods and
services have been delivered or are ready to be shipped. The
capture takes place when the credit card authorization
information is given to the issuing bank and the consumer's
credit card is charged for goods and services
requested/received. This entire process takes place in less than
ten seconds. Finally, when the merchant decides to settle batch,
the acquiring processor finalizes the credit card transaction
with the issuing bank and they transfer money into the
merchant's bank.
Mail-Order/Telephone Merchants instead of swiping the
credit card through the credit card machine, key in the
information into the credit card machine. If the merchant
prefers to use software for credit card authorization, then this
can be done using a virtual terminal. A virtual terminal will
allow the merchant to process credit cards over the Internet by
logging on to the secure socket of the gateway provider and
inputting the credit card processing criteria manually.
Online Merchants are the consumer that goes to a web
site, chooses goods and/or services, and fills out the merchant
commerce application. Consumer enters credit card information
into a secured form that is sent over the Internet via Real Time
Online Processing software, which then sends the encrypted
transaction to the acquiring processor for credit card
authorization. Acquiring processor sends transaction to card
association, which in turn sends the request for credit card
authorization to the issuing bank. Issuing bank accepts or
declines the credit card transaction and sends message to the
card association. The card association contacts the credit card
processor with the credit card authorization, and then the
request to deliver goods and services is given to the merchant
by way of the online credit card processing software. Merchant
sends the credit card processing company fulfillment
notification to permit settlement meaning that the goods and
services have been delivered or are ready to be shipped. The
capture takes place when the credit card authorization
information is given to the issuing bank and the consumer's
credit card is charged for goods and services
requested/received. The entire process takes place in less than
ten seconds. Finally, when the merchant decides to settle batch,
the acquiring processor finalizes the credit card transaction
with the issuing bank and they transfer money into the
merchant's bank.