A new merchant account is an industry term for a relation whereby a business and a bank arrange to process credit card payments. The creation of a new merchant account usually involves familiarizing the bank with your proposed business and arranging with a third-party processor to accept received payments. Merchant accounts are also often required for operating an electronic commerce website in which customers send credit card or other electronic payments.
There are primarily three types of new merchant accounts that can be created: retail merchant, MOTO, and internet. Retail merchant accounts usually offer the lowest transaction fee and require that a high percentage of transactions have the credit card present to be scanned, or swiped, at a credit card terminal. This type of account is for businesses with physically present customers and very little mail order or online sales, such as restaurants, grocery stores, gas stations or small hotels.
Mail order/telephone order (MOTO) merchant accounts tend to charge a higher transaction rate, and are used where the customer is not physically present to have their card scanned. Under these circumstances, businesses enter the credit card information into a terminal connected to a personal computer, or directly into a website.
Internet merchant accounts are much like MOTO accounts, but are designed only for internet usage. Businesses with these accounts use a terminal or payment service to process payments. Payment service gateways are generally included with most web-hosting packages, making the transactions a simple process.
When creating a new merchant account, it is important to choose the right type for your business. It is a good idea to carefully research the available payment service providers and to understand their terms of service explicitly.
Posted in 
Tags: 