Quick Answer: What Is The Purpose Of A Merchant Account?

What does merchant account mean?

A merchant account is a special type of business bank account that allows you to securely accept credit, debit, and other electronic payments.

It acts as an intermediary between your business and the individual card-issuing banks that offer your customers the credit or debit cards they use to make purchases..

Why do we need a merchant account?

A merchant account serves as an intermediary between customers’ bank accounts and your business’s bank account as electronic payments, including credit card transactions, are processed. … To do so, you will usually also need some hardware, which might be available for purchase through your credit card processing partner.

What is a merchant summary?

The Merchant Account Summary Report provides the total number of transactions and total amounts processed for each Gateway Account associated with your Merchant Accounts and for each type of credit card within each Gateway Account. … This report is accessed from the Transaction Reports in Data Management.

Is PayPal a merchant account?

PayPal is not a merchant account provider. It is a third-party processor — also known as a payment service provider (PSP) or a merchant aggregator — and it aggregates all of its seller accounts into one large merchant account.

What is a merchant payment?

“Merchant” is a term used by payment processors to refer to their customers. Customers, or merchants, are businesses that accept credit card payments from their clients in-person, online, or over the phone.

What is the difference between a merchant account and a payment gateway?

In fact, the two serve totally different functions: a payment gateway facilitates online transactions and allows you to process them, while a merchant account is a holding account where those payments first land before being deposited into your regular bank account.

How does a merchant account work?

A merchant account is a type of bank account that allows businesses to accept payments by debit or credit cards. … When a customer pays for a product or service with a credit card, the funds are first deposited into the merchant account and from there eventually transferred to the business bank account.

What do I need to get a merchant account?

While it’s important to check the requirements for your specific merchant account and application, you can generally expect to provide the following:Business bank account. … Financial statements. … Business license. … Physical address. … Completed Application. … Employer Identification Number (EIN) … Articles of incorporation.More items…•

Who is the merchant in a transaction?

Merchant: A commercial entity or person authorized to accept cards and receive payments from its customers pursuant to agreement with the card brands. Merchant (or acquiring) bank: The financial institution that has an agreement with a merchant to accept (acquire) deposits generated by card transactions.

How hard is it to get a merchant account?

The reality is that it is much easier to get a merchant account today than it ever has been. In fact, the requirements in order to establish a merchant account are quite easy to satisfy. Although some businesses choose to incorporate, many of our customers register their business as a sole proprietorship.

How much does it cost to get a merchant account?

Most providers will charge you a monthly, ongoing fee for their merchant account services, as well. This will typically be a flat fee of $10 to $30 that could be called a statement fee, an account fee, or simply a monthly fee.

What is the best merchant account?

Square: Best Low-Fee Payment Processor.Helcim: Best For Small Business Overall.Flagship Merchant Services: Merchant Service Provider With the Best Contract.Fiserv: Best Merchant Account Provider for Retail.PayPal Credit Card Processing: Best Low-Volume Payment Processor.