While it is easy to understand how credit card processing can impact the success of your business, setting it up in your own business is often a confusing subject. One of the most important things, though, that you have to be familiar with before you can accept plastic money as payment is the merchant account. What is it all about, you may ask. Basically it is a special type of account that is set up for a business to be able to accept credit card payments. A bank, a financial institution, a credit card company or other payment processor offers such an account.
Among these types are retail, MOTO (Mail Order – Telephone Order) and Internet merchant accounts. The first type, which is the retail account charges the lowest transaction fee. However this often comes with stringent rules, one of which is its requirement for a bulk of the transactions to be carried out with the card present, which should be swiped through a terminal. This kind of account is mostly used by restaurants, grocery stores and even small hotels. The MOTO accounts, on the other hand, have higher associated transaction fees. This is because they are used for cardless transactions, which tend to have higher risks. The last type, which is the Internet account is similar to MOTO because the transactions do not involve the physical use of the card. What merchants use for the credit card processing is a virtual terminal or payment service gateway. It is important for every merchant to have a clear understanding of each account type including its provisions and costs for the right choice to be made.