When you go into a shop and use your credit card to pay for your purchases, you don’t often stop to consider the processes that need to be in place to allow you to use your card in the first place.
We’re going to be taking a look at what needs to happen in a shop to enable you to be able to use your credit card, and how merchant accounts are used to allow stores to accept credit card payments.
When you go into a shop and try and use your credit card to purchase something, the person who is selling the items needs to have a merchant account to be able to accept credit card payments at all. For this to happen, the vendor would need to be granted merchant status by a bank, which would, in turn, grant them a merchant ID, which is sometimes referred to as a MID.
This account automatically connects with the credit card and checks several things about it. It makes sure that the information on the card is correct, and also identifies if the card has been reported as being stolen and that it does contain the funds required to pay for the goods. Banks will usually charge monthly for the ability to accept credit card payments, but there can also be annual fees as well depending on the situation. Furthermore, for every transaction processed by the bank, they will charge the vendor a percentage of the money.
Online payments work slightly differently to the standard method in shops. The payment gateway acts as a bridge between your website and the banks which process the transactions. The process works by sending the submitted credit card details and customer information from the internet site to the merchant account, where the transaction is then dealt with by the bank. Something which is worth noting is that you need both a merchant account and a payment gateway to process and allow online transactions, so you may find you need to locate both of these things individually. This means that you could find yourself paying two sets of fees to be able to accept online payments.
Overall, the process of being able to accept credit card payments relies solely upon having a merchant account and a merchant ID. Approved by the banks, this is what allows you to go into a shop, and pay for something with a credit or debit card. It’s worth noting that you will be charged a monthly or annual fee by the banks if you have a merchant account, and you’ll also be charged for the setup. However, it will enable you to trade on a higher level than you were able to previously, so if you can afford to accept cards then it is well worth obtaining a merchant account.
Yes. On top of our Payment Gateway Services, we help you open your merchant account so that you start processing as soon as possible. We are already integrated with international acquirers so this is an easy job for us. Fill in our Merchant Pre-App and we’ll come back to you to discuss the details of your application.
Yes. We can integrate your MID into the Dalberry platform with a seamless transition. You’ll get access to reports, analytics, risk and fraud tools and all the services provided by Dalberry.