YOUR INTERNET MERCHANT ACCOUNT & YOUR BANK ACCOUNT

Your Internet Merchant Account

If yours in an online venture or you would like to expand your business by going virtual, you will have to look into ways that you can accept credit card payments online. Signing up for an Internet merchant account, also known as online merchant account, allows you to process credit card transactions online.

The demand for online merchant accounts has grown dramatically over the recent years. Consequently, so has the supply. There are numerous merchant account providers in the market and they offer you a huge range of products and services with their merchant accounts.

The basic necessities to process credit cards online include a shopping cart, a payment gateway and a merchant account. Most merchant accounts provide these as a package. This eliminates any chance of getting a payment gateway that is not compatible with your shopping cart.  

Most merchant accounts are supplemented with features that update your customer database automatically, prepare detailed transaction reports for you and provide you with 24/7 customer service.

Merchant accounts also allow you to accept payments in various currencies. Hence, your business can truly grow globally.
An Internet Merchant Account Is Not A Bank Account
Most people are confused between a merchant account and a bank account. They think that the two accounts are the same. However, they are not.

The confusion between an Internet merchant account and a bank account rises probably due to the fact that merchant accounts can be opened with banks.

Banks do offer merchant accounts but they are more stringent about the eligibility criteria. This is largely due to the fact that banks are quite risk aversive. They are not as equipped as merchant account providers to deal with credit card fraud and chargebacks.

Furthermore, banks are more reluctant to provide you with a merchant account if you own an online venture as compared to a retail business. This is because online merchant accounts are card-not-present merchant accounts which are more susceptible to fraud and chargebacks.

Banks source out the merchant account services they provide. Hence, their charges are usually more costly as well.
A more popular option to obtain a merchant account from is a merchant account provider. This is especially the case for merchants with online ventures. It is easier for them to open up an Internet merchant account with a merchant account provider than with a bank. It is also more affordable.

The Link Between Your Internet Merchant Account and Your Bank Account

When each credit card payment is processed, funds from the issuer of the credit card (if approved) would be transferred to the merchant account. Then these funds will be moved from the merchant account to your stipulated bank account. Hence, the merchant account provider is sort of an intermediary between the credit card issuer and your bank. The provider deals with your bank on your behalf.

For further information:
On opening a merchant account with a bank 
merchant_card_processing

To understand the details of how a credit card payment is processed
http://www.ourshop.org/resources/internet-merchant-accounts.html