Following are a few terms that are frequently used in Merchant Accounts:

Discount Rate – This rate is a tiny percentage that gets removed from the order’s total cost. The Discount Rate is one among the two costs for processing which are involved while accepting credit cards. This rate varies with respect to swiping or non-swiping of customers’ credit cards during sale.

Transaction Fee – This is the 2nd type among the 2 processing fees involved that is encountered with merchant accounts. Apart from discount rate, this fee is a small amount that will be charged. As it is with the discount rate, transaction fess top varies with respect to the swiping or non-swiping of a customer’s credit card.

Gateway – The passing of information of a credit card from the website of a merchant to a processing bank is referred to as Gateway. This procedure is a secure one. VeriSign, ECHO, OffshoreMerchants.Net, are a few payment gateways. Only Internet merchants require a gateway. Most of the providers of merchant accounts charge a monthly fee for a gateway.

Charge Back – This is the charge when customers dispute their credit-card charges and the credit care companies to remove this charge. Some of the charge back occurs when a customer fails to recognise the name of the firm on the statement of their credit cards.

Reserve – A small percentage of the sale that will be with-held for a particular time period in order to cover issues related to charge back. The amount that will be with-held depends on the provider of merchant accounts.

Monthly Minimum – This is the fees that must be met each month. If the sales if a particular month do not meet monthly minimum, then the merchant should make up for this difference.

Card Verification Value (CVC2 / CVV2) – This is the 3-digit security number printed on the reverse of credit cards. Asking for this number during checking-out orders will reduces instances of charge back as well as frauds made by credit cards.

Factoring – This term is applicable in e-commerce to companies which offer processing of transactions made by credit cards through the trader’s own account. This practice is considered illegal and could result in huge fines.

Real-time Processing – The immediate processing of a transaction made by credit card after a customer makes a purchase.

Batch – A Batch is a collection of transactions made by a credit card which are saved in order to submit at each business day’s end.

Authorization – This is a process where permissions are granted by the issuer of the credit card, usually a financial institution, which allows the transaction of payments to proceed further. This process ensures that the credit available on a card will not exceed.

Address Verification System (AVS) – The AVS service is used to check if the customer’s billing address is a match with the one on their credit card. If the AVS service is not opted for, then an additional charge will be added on the sales. However, most of the merchant accounts have the AVS service with no extra fees.

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.