Probing Into Merchant Account And Terminal Requirements For Credit Card Processing

You will be better off if you know the answers to different questions regarding credit card processing that may come to your mind, quite naturally if you wish to accept credit card payments from your consumers.

To start with, if you are wondering whether or not you want a merchant account to accept credit card payment you must know that it is essential to have one such account.

  • This is a special account which is more of an arrangement between you, or your business to be more precise and the credit card processor you have chosen.
  • This will allowyou to accept credit card payments from the consumers and deposit those payments into your bank account by your credit card processor.

While applying for one such merchant account you may now wonder what the types of it are and which one to choose for your business. Ideally, there are two types of merchant accounts such as:

  • A merchant account can be for a ‘cardpresent transactions.’This is used when both the credit card holder and the card are physically present while making the payment for a sale.
  • A merchant account can also be for a ‘cardnotpresent transaction’ or CNP transaction as well. As it is implied, neither the credit card nor the holder is present during the sale. A typical example is the sales made by the ecommerce site, through mail order and telephone order.

If your business type involves both these types of credit card usage, then you will need to apply for both types of merchant accounts to deal with the ‘cardpresent’ and ‘cardnotpresent’ scenarios both.

Setting up a merchant account

When you want to get a merchant account, you will need to follow a specific process as required by the credit card processors.

  • First, you will have to fill out a specific application form.
  • Next, you will have to get it approved by your credit card processor.
  • Then, the processor will equip you with the products and services that you will require to accept credit card payments.

The credit card processor here typically acts just like a middleman between the issuing bank and you while making any credit card transaction. The issuing bank also plays a very significant role in credit card processing such as:

  • They will provide credit to the credit card holders and
  • They will authorize the transaction of a customer.

Once that is done, the payment will be credited to your merchant account by the credit card processor.

  • You will need to settle all of the transaction at the end of each day with the credit card processor in one batch.
  • The processor in turn will then deposit the money into your bank account which is typically done within two days of the transaction.

Expert tips: The credit card industry experts suggest that while setting up your merchant account, one or both you should take help of a credit card processor like or others. This will allow you to use the bank you want to choose to make such deposits. It is also said by the experts that it is ideal to keep your merchant account separate from any other of your bank accounts.

About compliance and regulatory

It is extremely important that you comply with all the regulations of accepting credit card payments in your business. This is because when you accept such payments you will be dealing with highly sensitive financial as well as personal information. It is for this reason the electronic payments industry is such highly regulated to avoid misuse of funds and personal data.

You are therefore requested to view and review your merchant account statement on a regular basis, preferably every month.

  • It will be easy for you to keep a track and check for the accuracy in it.
  • It will also help you to keep a tab on all your processing expenses.

Most of the credit card processors will provide such statements that are simplified and involves every step of a transaction.

About terminal account

It is important for you to choose a terminal that will be most suitable for your specific type of business when you want to accept credit card payments. If you have a traditional business setup and want to have facetoface transactions, it is best that you choose a ‘PointOfSale’ terminal. This option will help you to ensure security irrespective of the type of card you wish to accept for payments. It includes all possible types of card payments such as:

Remember, a proper selection and use of terminal will help you to prevent losing lots of money and costing your business heavily.

Updating and authenticating

You must also authenticate your terminal to provide more trust to the consumers when they make a credit card payment.

  • With such terminal authentication you will be able to prevent unauthorized access of any kind to your merchant PointofSaledevice.
  • Ideally, when you have your terminal authenticated and updated, users will need to know the authentication code as well as your ZIP code.

In addition to that, when you want your terminal to work perfectly for your credit card payment processing you will need to update the date and time on it on a regular basis. If you do not know how to do it then you should look for the type of your terminal and follow the instructions regarding date and time updating.

Wrapping it up

Ask your credit card processor everything about merchant accounts, terminal and credit card processing as well as the types of services and products that they offer when you apply. Ask about:

  • The processing and approval time
  • The kind of businesses accepted
  • What happens when you have less than the perfect credit
  • Whether you need a business license or not as a premise inspection requirement and
  • Need of a business checking account.

In addition to that, ask about the type of cards you should accept.


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