What are merchant accounts?

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What are merchant accounts?  

Essentially, merchant accounts are a specific kind of bank account that let's companies take debit or credit card payments. 

While credit card transactions are inherently more involved than that, they are really a little more complicated than that. What merchant Bank accounts actually represent is a contract between your bank, the bank of the client, the customer's bank, and the credit card processor. Your credit card processor (more on them below) submits the transaction to the credit card interchange, which then directs it to the customer's issuing bank for approval. Here is how it works: when one of your customers purchases one of your items (congrats! ), they pay with a credit card.  

After a transaction is authorised, the funds are transferred by your credit card processor into your merchant account. But, you do not actually own the money. The money must then be moved from your business bank account to the merchant account, which is run by your credit card processor (operated by your bank). Then—and only then—can you treat yourself to something lovely with your brand-new, gleaming riches. It's a labor-intensive process.  

How to accept online payments without merchant accounts 

Another negative feature of merchant accounts is the potential for payment delays from your merchant account—which is basically held in escrow—to your personal bank account, taking away some of your authority over your company.  

Typically, every other day or once a week, the majority of credit card providers handle their merchant account transactions in batches. Of course, this may be troublesome, or at worst, devastating, if you have payroll due soon, or if you have an invoice payment due, or if there are any number of other easily imagined and utterly banal reasons why the health of your cash flow is crucial.  

How to accept online payments without a merchant account 

Business could think about using services like PayPal, Square, or Paymentsclairty to take online payments without a merchant account because merchant accounts can have high costs. If you're going abroad, beware of large margins on the currency rate for international transactions, regardless of the firm you pick. 

Can you make out that noise? It is the fast evolving global economy. The strength and reach of worldwide business are now within anyone's reach, no matter how tiny their firm, thanks to the internet's explosive growth. 

Certainly, with the correct tools, even the newest, most enthusiastic online vendors can go head-to-head with the established players. And it almost goes without saying that having the capacity to take online payments is possibly the most crucial tool of all. 

Online merchants that wish to learn how to take payments online, particularly credit and debit cards, have a variety of possibilities. Among them, merchant accounts are the most prevalent.  

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