Setting up a merchant account

A merchant account is a special account for trading that allows you to accept payments directly on the site from various letters of credit. It is possible to open several accounts at the same time, which increases the level of sales. A merchant account is a special code that allows the identification of the customer in the payment system. Combines financial and information processing activities.

Merchant accounts are classified by the method of scanning information from a bank card when making a payment:

• Card present – trading account: payment is made by scanning information with special equipment (POS terminal/imprinter).
• Card not present – Internet merchant account: it is used in all types of online commerce, without the presence of the payer, by filling out an online form, or by making a phone call, after which the money is debited and redirected to the company’s bank account.
  From the form of action and the degree of return of payments, the merchant account is high risk – high risk; low risk – low risk. The percentage of the bank’s commission on payments made depends on the level of risk.

How merchant account works

The acquiring bank/acquirer is in charge of regulating the process of transferring money to the current account. It processes (processes) payments on credit/debit cards for services or goods. The bank assigns an identification number to the company that opens the account. It is unique and is present in each of the payments, plus it assigns the same number to a specific bank account. A prerequisite is the availability of a payment gateway, special software, an intermediate link between the purchase itself and all financial elements, from the payer’s identification code to the bank. This gateway minimizes the risk of fraud, thanks to the functions of checking the card for activity, encoding purchase information, transferring this information to the right place, decoding information, returning information to the site. Only after that, the operation is confirmed or a refusal to carry its outcomes. An account is issued only for a legal entity.

Banks request a package of documents, which includes: a source confirming the registration of a company, a license, a charter, the presence of a current account, the existence of a website, a founding agreement, personal data of the owners of the company. The bank also focuses on the service sector, the approximate volume of goods that are sold, the average total of payments, and the currency used in transactions. The key point is the terms of the chargeback – a chargeback that allows you to forcibly return funds to the client’s current account if they were debited illegally. Used to protect consumer rights. The acquirer controls the chargeback operations and this affects the decision to connect the merchant account. In this way, banks can protect themselves. Requirements for the website of the company that opens a merchant account: must be hosted on a paid resource, web pages must be in the same address zone.

The main interface bears the logos of international payment systems that can carry out financial transfers. The payer’s details are allowed to be entered on the secure pages of the processing authority. The site should contain a description of the product or service that is provided. Also, a detailed description of payment methods, prices, ordering, conditions for its return, the company’s line of conduct in working with confidential customer data, the existence of a registration and authorization section.

Merchant account benefits:

• round-the-clock work;
• high speed of transaction processing (on average, thousands of operations per minute);
• high level of security and confidentiality of operations;
• no additional costs;
• optimization of taxation;
• the opportunity to work in foreign markets;
• availability of introduction and further maintenance;
• there is no foreign exchange control.