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SOCIAL MERCHANT ACCOUNT
A social merchant account is also a bank
account which has a very low rate of
income. The registration fee for this
type of account is also less as compared
to the other merchant accounts. This
type of account is normally provided to
charitable trusts or NGOs which are
meant for social services. NGO products
also exist in the market and they are
cheaper in price. They charge lesser
prices only to support the organisation.
It is like serving the society but some
charges are applicable here.
Donations are the key factor of income
for such organisations. People who are
very wealthy donate huge sums of money
to NGOs and charitable trusts. It cannot
be made sure that they always carry
money with them. So a social merchant
account holder is also provided with
electronic banking facilities. A social
merchant can also use the internet
services to reach the people regarding
their products far and wide. A card
terminal can be used by a social
merchant to receive payments through
credit cards. Most of the people use
their credit card to make payments for
the transactions that they make. There
is also a discount rate for the social
merchant account holders for processing
of credit cards.
There are various NGOs in the world. One
of the greatest NGO is the Red Cross
Society. This organisation is spread
world wide crossing international
boundaries. These types of organisations
are given the electronic banking
facilities and are also provided with a
social merchant accounts. A normal
merchant account needs a bank statement
of two years in order to protect
fraudulent cases. A thorough check on
the background of the NGO is done by the
bank before issuing the merchant with a
social merchant account. If an NGO or
any charitable trust fails to fulfil the
criteria set by the banks to provide a
social merchant account then they are
directly refused by the banks. Social
Merchant accounts have acquired great
importance in modern times. It is only
with the help of social merchant
accounting that one can clearly trace
the effects of changes in one section of
the economy on its other sections.
In economic terms, in social merchant
accounts, we are concerned with the
statistical classification of the
economic activities so that we are able
to understand clearly and easily the
operation of social merchant account as
a whole. “The term social merchant
account is used in a general sense to
denote an organised arrangement of all
transactions, actual or imputed, in an
electronic banking system”. Social
merchant account embraces not only the
classification of merchandise industry
but also the application of the
information based on the operation of a
merchant account. In social merchant
account, a transactor has to keep a set
of accounts in which transactions are
entered. Incomes and outgoings related
to a productive activity of the merchant
are bought together. This shows the
assets and the liabilities of the
merchant concerned in the beginning and
at the end of the accounting period. The
transaction records form the units in a
system of social merchant accounts. |
