About Merchant Accounts, Agreements, and Fees

A merchant account can be described as a bank account, which is mainly used for business. It permits your business to accept and process e-payment card transactions. If you have a merchant account then it is very important that your business is in a connection with a merchant acquiring bank that provides all the details of the communication in an e-payment transaction. Merchant accounts are also known as a type of commercial bank accounts. A merchant account is a type of bank account for businesses in which the business organization or companies can accept payments and make payments. Credit cards and other forms of e-payments can be accepted through merchant accounts.

Merchant Account – 

One thing you should know about the merchant account services is that there are added fees that you have to pay, but it also comes with different kinds of services. It is necessary for online businesses to have a merchant account partnership as a part of their business operations as electronic payment processing is the option for the customers to make any purchase or buy anything. If you are planning to offer e-payment options for goods and services, then it is important for you to create a merchant account with a merchant acquiring bank. In any electronic payment process, you will see that merchant acquiring banks play a very important role.

Agreement for Merchant Accounts – 

For settlement of transactions and efficient processing merchant acquiring banks are required. Before opening any merchant account, you will have to get into a merchant account agreement, that outlines all the T&C involved in the use of the merchant accounts, e-payments, etc. Some of the important terms or conditions comprise of the charges per transaction, that the bank will charge, the bank’s credit card processing network, fee structure along with the network and card processor, annual or monthly fees of the banks for other kinds of services, etc.

Fees and Percentage of Deduction – 

In this merchant account services or processing, all the transactions take place within a matter of minutes. Various fees are also there that are incurred for the transaction and it is deducted from the merchant account. For per transaction, the fees are deducted accordingly, the fees that are deducted per transaction ranges from 0.5% to 5.0%, apart from these fees and charges, the merchant acquiring banks charge monthly fees also, including any special fees if any. There is also an internet merchant account that is different from other merchant accounts. In this type of merchant account, the fees are higher because of the risk of payment online, as compared to the other one, which is a face-to-face credit/debit card transaction.

Payment Gateway & Common Fees – 

If you are taking a credit card payment over the internet, then you will also be required to have a payment gateway. The payment gateway authenticates the submitted credit card information. The same which the point of sale machine does. Merchant accounts can have different types of fees that may be outlined in the contract. Some of the common fees are – Application Fees, Setup Fees, Monthly Fees, Discount Rate, Per-Transaction Fees, Cross-border Fees, and Rental fees for a credit card terminal.