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Merchant Account FAQ

Merchant Account FAQ's

What is a Merchant Account?
A merchant account is a commercial bank account established by contractual agreement between your business and the banks we represent. A merchant account enables your business to accept credit card payments from your customers. The funds are electronically deposited into your business checking account.

How does it work?
The merchant account provider authorizes the credit card transfer from your customer and deposits the funds for their purchases directly into your business checking account, typically within two business days.

How will my business receive payment for each transaction?
Once the transaction has been approved your customer's charges are deposited directly from our credit card processor to your bank account. Transaction deposits range from 24-48 hours from the date of the transaction.

Why does my business need to accept credit cards from my customers?
By accepting major credit cards you can increase your credibility, customer convenience, and best of all, your sales. Statistics say accepting credit cards can increase sales by 1000% !

Are my funds guaranteed?
Any customer has the right to dispute a credit card charge from the card's issuing bank. If a charge is challenged, a retrieval request will be sent to the merchant asking for proof that a sale had been made by the customer. In addition, the merchant's credit card processor has the right to discontinue service for many reasons. And finally, a merchant should take due diligence to protect against someone trying to order merchandise with stolen cards by becoming familiar with the process.

What is Address Verification Service?
AVS is a service that is built into the authorization process to help prevent fraudulent transactions. The numerical portion of a consumer's address is sent along with the transaction data and is matched against the address that is registered with the consumer's credit card from their issuer's bank. A response code is sent back with the approval (or decline)message that indicates a match or not. Currently, a match or mismatch is simply reported back to the merchant and does NOT result in a transaction decline. The merchant then has the option to contact their customer to confirm the correct address before they ship any goods.

What kind of equipment do I need to process credit cards?
A computer terminal or PC with Internet access can be used for Internet, mail, and telephone orders. In the retail environment, a specialized terminal/printer designed to read the magnetic strip on the back of the customer's credit card is used. This device provides the customer with a paper receipt at the time of purchase. An imprinter, which takes a physical copy of the customers credit card, may also be used.

Why am I asked for an average sale amount?
For security and fraud control purposes, banks have procedures to evaluate a merchant's processing trends. If a sale is well over the projected average ticket amount, our Security Department may call the merchant or credit card customer to verify the sale's legitimacy.

What are the discount rates?
Every bank charges a fee (discount rate) to merchants that accept credit cards. Discount rates are the percentage of each transaction that the bank charges to handle the transaction. The rate is calculated by multiplying the discount rate times the amount of each transaction. Let's assume a discount rate of 2.30% and a transaction of $50. The fee paid to the bank would be $50 x 2.30% = $1.15.


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