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OBSTACLES IN THE SMOOTH FUNCTIONING OF
MERCHANT ACCOUNT
The first and foremost thing for a
merchant account holder is that, only
one account per product is actually
allowed. This is a rule set by the banks
and other financial institutions. The
charges for the registration and the set
ups are costly but it is a onetime fee
charged by the bank as a security
against the merchant accounts. So, to
sell their products, the merchants have
to open many different accounts as per
the number of products they sell. This
will cost huge investment as well as
heavy business expenditure for the
merchant. These are the obstacles in the
smooth functioning of merchant account.
A merchant may not have a high return on
sales therefore these offers are not
affordable by the new merchants who run
small scale business industries.
Different products are allowed to place
only in the different account types of
merchant account but, however, all the
products of one particular merchant may
come under the same business domain or
name.
The internet service provider (ISP)
controls the overall working of the
merchant account businesses at the
backend. If all the products of a single
merchant were placed under one account
name then how can the internet service
providers or the e-commerce businesses
make earnings? It also means that the
merchants use the internet service to
sell their products and they make huge
profits from the business. If more
products are sold under a single
merchant account or domain, then the
merchant’s profit would increase but not
the banks and the service providers
because the merchant has paid only for
one account. If a merchant processes
lesser credit cards in a month, then the
bank will charge some amount as penalty.
The bank fixes a minimum transaction
limit of the credit card, failing to
which a merchant account will be
terminated or cancelled or withheld
until payments are made.
Certain formalities are place before the
merchants during the process of
obtaining the facilities and services of
an internet banking system. A merchant
may be doing a big business but the
banks do not allow anyone to have a
single account for various purposes. The
banks also doesn’t allow such type of
account as there are certain risk
involved during the assessment and
evaluation period. If a merchant fails
to follow the rules that are set by the
bank, a fraud case will be filed against
the merchant, immediately. A reputed
merchant can attracts lot of customers
and that is the reason how business
reaches to a high level. In order to
stand firmly in the market situations, a
merchant has to fulfil all the legal
formalities for the business operations.
A merchant can transfer from one
merchant account provider to another.
But the main problem is, a certain
amount of fees has to be paid to the
bank while making transfers. The frauds
are the biggest obstacle in the
merchandise business. Due to these
fraudsters, the banks don’t trust the
new merchants doing the merchandise
business. These are the obstacles in the
smooth functioning of merchant accounts. |
