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Merchant Accounts: The Key to a Better Understanding of Ecommerce


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While the word e-commerce has been in circulation for some years, some retailers still have no idea what it is. For a better understanding of the term and the processes involved in taking your business to the next level, this article will discuss the internal workings of the world of online processing.

It starts out with acquiring a merchant account. Unlike offline businesses, online merchants do not have the luxury of having a physical point-of-sale terminal to start processing their sales. What they have instead is a software that enables them to accept purchases and payments. A virtual shopping cart lets the buyers check-in what they intend on buying. The upside to this modern function: it lets the buyer think their purchases through first.

The shopping cart is connected to a payment gateway. In essence, a payment gateway is an interface that facilitates the transactions between the financial networks and your website's virtual POS. Payment gateways allow real time transactions – including authorization, processing and management. It is one of the factors that allows online merchants to receive credit card payments. Be aware though, that having access to a payment gateway does not mean you would be able to automatically receive payments. The transactions have to be routed through financial institutions.

This is where the merchant account comes in. A merchant account is your key to receiving online payments (such as paperless checks and credit cards). It is a type of bank account granted to merchants by acquiring banks. Merchants have to go through an approval process to obtain said merchant account.

Note that different banks have different requirements for its merchant applicants. Those in the high-risk category (adult industry, gambling, pharmaceuticals, MOTO, etc) have very limited resources for acquiring merchant accounts. Credit card associations like Visa and MasterCard impose very strict standard when it comes to high-risk accounts. They are often monitored for chargeback ratio and other factors.

While the process may look difficult at first, it is fairly simple and the benefits are far greater than the initial effort that you'd have to exert. Having an e-commerce website automates your processes and makes your site a global affair with the ability to accept payments round-the-clock.

Merchant account providers like eMerchantPay ( offers services suited for all types of merchants, including those in the restricted industries. This particular service provider offers superior gateway technology with effective fraud protection, fast application and approval process, diverse solutions to cover most merchant categories and sizes and on-time payout on a weekly basis.

There are many other merchant account and payment gateway service providers out there, so be sure to go through each with a fine-toothed comb. Find out what they can offer you other than the basic merchant account acquisition. Those that have multiple quality acquirer banks are more beneficial for you, as they will be able to offer you more uptime. Another consideration would be the cost. Find out if the service provider charges you on a monthly basis or per transaction. Make sure you also ask if they charge any upfront fees.

An outspoken author and proponent of online marketing initiatives, Mary Harkness has been writing and giving talks on the various methods of effective marketing since 2000. She has been largely involved in marketing campaigns for various online industries, such as adult, gambling, pharmaceuticals, and travel and hotel services. Harkness is also the author of three books on effective marketing strategies, and a contributor for sites like eMerchantPay ( )


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