A merchant account is a type of bank account owned by businesses that allow them to accept credit card and debit card payments. More specifically, however, it’s an agreement between a merchant, a bank, and a payment processor for the secure facilitation of credit card and debit card transactions.
We’ll be breaking down all the different types of merchant accounts below, with explanations on how they work, and exactly what type of merchant account your business will need!
Retail Merchant Accounts
Retail merchant accounts are designed for brick-and-mortar businesses and stores. The distinction between this type of account and others is because retail businesses operate primarily on card-present transactions; where both the credit card and the credit card owner are present to confirm the transfer of funds!
To exemplify this process, let’s take a look at a merchant processor that offers services that facilitates these kinds of transfers. For that, we’ll be looking into Platinum Payment Systems; a well-known payment processing service provider that provides merchant processing for all the different types of accounts.
When working with brick-and-mortar businesses, Platinum Payment Systems starts by providing payment processing equipment. This equipment takes the form of credit and debit card terminals or swipers that are used at the point-of-sale — when either the merchant or the customer swipes the credit or debit card — to confirm the authorization of the payment.
Depending on the merchant processor that you work with, you also get added service perks to your merchant account. For example, with Platinum Payment Systems, their managing partner, Jed Morley claims that their goal is to: “Help others solve their payment processing problems — regardless of the size of their business, or what they need to do in order to handle risks and balance the different types of payments they receive.” To this end, they offer added chargeback and fraud protection, as well as provide low and honest rates that they claim can save you up to 10-20% in credit and debit card transactions.
MOTO Merchant Accounts
MOTO merchant accounts are for businesses who deal with mail order or telephone order transactions. They’re certainly no longer as commonly used as before, especially now that online shopping has taken hold all over the world, but there are still millions of buyers that prefer to do their shopping through shop catalogs, TV infomercials, wholesalers, and so on.
Of course, to cover these types of transactions, Platinum Payment Systems, and other select merchant processors, offer MOTO merchant accounts so that these MOTO merchants can accept payment through mail, phone, or, even, fax!
These types of transactions are considered card-not-present transactions and are processed through virtual terminals — not unlike what is used for E-Commerce stores — that can be installed on any computer or tablet with internet access.
Lastly, it should be noted that these types of transactions are considered riskier than transactions done at a retail location. But, thankfully, Platinum Payment Systems and other merchant processors make up for this increased risk by providing more security against fraudulent transactions and chargebacks.
E-Commerce Merchant Accounts
E-Commerce merchant accounts are the last type of accounts that we’ll be breaking down today. These accounts are primarily for online merchants or stores — who sell their goods and services online.
Now, much like with the other types of merchant accounts, E-Commerce accounts are offered by merchant processors like Platinum Payment Systems so that merchants can accept and receive payments from their customers.
These types of accounts are highly regulated as, much like MOTO merchant accounts, they can leave merchants at risk for fraud, chargebacks, and phishing attacks. But, as mentioned previously, thankfully, Platinum Payment Systems, and other merchant processors, offers their E-Commerce merchant accounts with built-in fraud and chargeback protection to protect merchants from such risks.
Which Merchant Account is the Right One for You?
The type of merchant account required by your business is highly dependent on what kind of payments you want to accept and how you want to accept those payments.
Of course, if you want to accept different types of transactions, then it’s best to work with processors like Platinum Payment Systems, as they offer payment processing for all types of transactions: credit and debit cards, ACH checks, mobile & online payments, MOTO transactions, and more.