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MERCHANT ACCOUNT TYPES
BASED ON VOLUME AND TYPE OF TRANSACTION
The most fundamental
merchant service that is provided by the
merchant service providers is a merchant
account. A merchant account is a special
type of account which aids in receiving
payments made by credit cards, and to
carry out online financial transactions.
Based on the type of transaction carried
out, the volume in which these
transactions occur, and many other
parameters, traders are eligible to set
up different kinds of merchant accounts.
Once a trader gets a particular type of
merchant account, he/she is informed the
ways in which these accounts can be
accessed. Also, a merchant is sent a set
of fees and rates which are associated
with merchant accounts.
There are three essential
kinds of merchant accounts which are
classified on the bases of type, and
volume if transactions encountered by
businesses. They are as follows:
-
Standard Merchant
Account.
-
High Risk Merchant
Account
-
Specialised Merchant
Account
Standard Merchant Account
– These accounts are of de-facto
standard and are known as the simplest
and most basic kind of merchant account.
Regular or standard merchant accounts
generally have a fixed transaction fee,
interchange fee, and set up fee linked
with them. These accounts are usually
assigned to online business or small
businesses since high volume of
transactions are not experienced with
these kinds of businesses. Certain kinds
of rates and fees are associated with
standard merchant accounts, irrespective
of the merchant account provider.
High Risk Merchant
Account – These kinds of accounts are
usually assigned to trade which have
high volume financial transactions,
especially those which have high volume
credit card payments. These merchant
accounts have zero or nominal set up
fees. Online casinos are an example of a
business which could be assigned a high
risk merchant account. As the online
casinos are spread across geographical
boundaries, transactions usually take
place in various currencies. A high risk
merchant account is usually provided
with special merchant services such as
fraud protection, real-time processing
of payments, merchant account
customisation and account management.
In addition to online
casinos, other commercial establishments
such as Starbucks and Wal-Mart will also
be given a high risk merchant account as
their business takes place is varied
locations every day.
Customised Merchant
Accounts – A merchant can ask for a
specialised merchant account if his
requirements do to meet the two already
mentioned categories. A merchant needs
to approach an organisation that offers
specialised merchant accounts and then
apply for one such account. The charges
for setting this type of account are
usually higher. Also, lots of paper work
is involved to acquire specialised
merchant accounts.
Regardless of what
merchant account businesses are
assigned, life gets simpler with their
usage of merchant service providers.
These providers not only offer merchant
accounts but also provide value-added
services. Most of the merchant service
firms offer several other additional
services apart from just a merchant
account. However, the service which is a
requisite for all the businesses these
days is an effective credit card or
online transaction system.
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