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DIRECT MODE OF PAYMENT IN MERCHANT
ACCOUNT
This is a great facility as well as
opportunity given by the bank to the
merchant account holders. A merchant has
to have a bank account in order to avail
the merchant account. The bank provides
a merchant account to the merchant who
applies for one, only after having a
thorough background check. Once all the
formalities are done and are correct as
well, the merchant account is issued.
Huge capital formation is required to
start a merchandise business. A merchant
also needs to have sufficient bank
deposit in his existing account. This
capital acts as a guarantor to the
banks.
We all know that the merchant account
holders accept payments through credit
cards. The credit card is electronically
verified by the payment gateway systems
or the credit card terminals. Certain
amount of money is charged for
processing of the debit/credit card.
Once the card is verified and processed,
the money is directly credited to the
merchant account holder’s bank account.
This is called direct mode of payment in
merchant account. The banks also provide
some discounts to the merchant for
processing more credit cards. This is
beneficial to the merchant as well as
the bank. The bank receives funds
through the processing fees as well as
the transaction fees as commission. The
merchant, using these services, can
promote their business well. An
important thing to remember is that, the
electronic banking systems as well as
the online merchant services appreciates
no credit. In other words, a customer
cannot purchase goods or products in
credit. The amount of the purchase has
to be paid directly through the credit
card or the debit card. Once the
customer’s credit card information is
linked with the online merchant’s
parameter, then the amount of the
transaction is directly transferred from
the customer’s bank account to the
merchant bank account instantaneously.
This is done through the electronic
banking system which use internet as a
main medium.
Direct mode of payment in merchant
account is required in order to prevent
any foul play during the transaction.
Due to the fraudsters, sometimes, if a
customer makes little mistake while
making transaction, then it is directly
cancelled by the electronic security
systems. Only three consecutive attempts
are allowed. If a customer fails to
enter the correct PIN code for making
any transaction through the credit card
then the card is blocked by the
provider. However, only the customer
care or the technical support can help
to solve such problems. This makes the
dealings and transactions safe. This is
mainly some to stop the frauds to make
use of the stolen credit cards. The
online marketing systems are directly
dealt between the customer and the
merchant. The distortion of the smooth
transaction is reduced by this system.
Hence, it results in direct mode of
payment in merchant account. Here, only
the buyer and the seller are present in
such marketplace. The bank takes all the
responsibility of verifying the
customer’s identity to make direct mode
of payment in merchant account possible.
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