What Are the Different Types of Merchant Accounts?

Do you want to have a merchant account? You might be wondering why you need one at all when you can just take cash. Here are some reasons why:

Why accept credit cards?

Your business needs to accept credit cards because more and more people are using them instead of cash. If you only accept cash, you might end up losing many customers. Moreover, accepting credit cards will increase your sales, is more convenient for most of your customers, and allows for faster checkout.

Types of merchant accounts

There are two broad categories under credit card processing: keyed and swiped. Swiped means that the customer has to be physically present to swipe his/her card. On the other hand, keyed refers to when a merchant takes information over the phone, on the internet, or through fax.

Under these categories, you will come across different methods of processing the information that is collected.

Swiped

Retail merchants – These merchants conduct their transactions in retail, face-to-face environments. The customer has to swipe his or her card through a credit card machine and his/her signature is captured on paper or on the terminal. This account is ideal for business owners who have a physical store where they offer vinyl plank flooring, suits, high end kitchen faucets, or furniture.

Lodging – Lodgings process their transactions just like retail merchants, except that they can adjust the price depending on the customer’s length of stay. Moreover, they can add extra charges that the customer incurred during his/her stay. Examples of this type of merchant include bed and breakfasts, hotels, and motels.

Mobile/wireless- With this account, the merchant conducts the transactions face-to-face, in a wireless environment due to the absence of a physical store. They use a wireless terminal instead of a traditional standalone unit. Good examples of this type of merchant are pizza delivery services and limo drivers.

Restaurant – Typically, restaurants conduct their transactions in a face-to-face environment, much like that of a retail store. The only difference is that this merchant might need the ability to add tips to their normal charges. To do this, a tip function is required, as it settles the transaction for large amounts, which include the tip.

Keyed

Face-to-face/mobile – the mobile merchant is ever on the go, like a vendor at a trade show. Instead of putting all his money into creating a wireless solution that allows customers to swipe their cards, this vendor uses touch tones, which allow him to take the customer’s information in person and key it in over the phone.

Mail and telephone order – in this one, the customer’s credit card information is taken over the phone through the internet or by mail. The transaction is then manually processed by keying the credit card information into a virtual terminal or credit card machine.

Ecommerce or internet merchants – these merchants conduct their business online through websites that utilize shopping carts as well as internet payment gateways. With a shopping cart, a customer can browse the website and add items to his/her cart then checkout, just like at a normal grocery store. The payment gateway can then collect the card information and process it in real time.

Do you have government, military, or business clients that want to pay you through a credit card? You should consider business to business merchant services. This option allows you to accept payments from government agencies without much hassle.

B2B merchants market their services or products to government entities or other businesses, not to end user customers. For this reason, you need to set up an account if you plan to start accepting credit card payment from other businesses. The account will save on money and time for transaction fees and processing.

Author Bio:

Taby G.

Title: Super-Connector at OutreachMama

Taby G. is a super-connector with Towering SEO and OutreachMama who helps businesses find their audience online through outreach, partnerships, and networking. With over 6 years of writing experience, Taby brings a vast amount of knowledge, style, and skill to every project. Her expertise lies in article/blog writing, eBooks, and SEO/informational writing. Copywriting and fiction are the icing of her work with excellent research skills and flawless grammar.

Twitter Handle: @outreachmama