Cashless Sale by Credit Card Payments – Get a High Risk Merchant Account Today

Today every business house is availing itself of a merchant bank account to ensure its ability to accept credit card payments as more and more customers flip out the credit card to complete their sale.

Retail merchant accounts are required by trade people to enable them to accept cash-less payments – or payment by credit and debit/ATM cards in face to face interactions with the customers.

Merchant account is actually a contract entered into by the businessperson and the acquiring bank, according to which the bank provides the businessperson with a line of credit. This is done so at the cost of a certain fee, which in turn consists of a discount rate, transaction fee, statement fee and a monthly minimum as well.

There are two types of merchant accounts – Over the Counter (OTC) and the Money Order/Telephone Order (MOTO). Over the counter type of accounts have lower fees and discount rates and they cater specifically to retailers – since here the buyer and the seller are vis-a-vis. Money Order/Telephone Order type accounts are used for internet based businesses. The payment is made, the veracity of the payer confirmed and the amount deducted from the consumer’s account. The amount is then placed in a 30-day holding account and the credit card charged only after the purchased article is shipped.

The tradesman now gets himself a Credit Card Terminal – which is an electronic equipment provided with a magnetic slot to read the card or, alternatively, a keypad to punch in the details. Once swiped, relevant details of the customer are transferred to the acquiring bank processor – directly, or via a payment gateway – and from the processor to the Card Issuing Bank. The issuing bank considers the validity of the deal by scrutinizing the customer’s account and then sends an authorization or rejection message to the acquiring bank processor. The response is transmitted back to the credit card terminal and contingent on the response, the customer’s receipt is printed. The amount obtained from the customer is then deposited in the tradesman’s account with the acquiring bank.

Depending on the amount and type of data a credit card transaction requires helps classify the level of the transaction. The standard deal is called ‘Level 1’. Those involving a more detailed information fall under ‘Level 2’. The highest level is the third level – these transactions are not carried out by retail merchants – instead, they are used when one corporate house is the customer of another, or if the government itself plays customer. Ordinary credit card terminals need additional software to transact level 3 dealings.

All these transmissions of data as sensitive as a customer’s credit card details are made through a 128-bit Secure Socket Layer (SSL) Internet Protocol (IP) connection. The SSL encrypts the data in order to protect it from computer hackers. In spite of that, the rate of credit card frauds is high. Several fraud prevention devices have been undertaken to check the rampant act of dishonesty:

         Address verification

         Code verification – three or four digit code called the CVV2 , CVC2, CID etc.

         Age and Name verification

Credit card transactions are characterized by the ease with which they are dealt with. Now safety is an added advantage.

Contact one of our helpful account representatives to assist you in the setup of a high risk merchant account or offshore merchant account for a high risk merchant.