Merchant Account Providers give businesses the ability to accept

debit Debits and credits in double-entry bookkeeping are entries made in account ledgers to record changes in value resulting from business transactions. A debit entry in an account represents a transfer of value ''to'' that account, and a credit ...

and

credit card A credit card is a payment card issued to users (cardholders) to enable the cardholder to pay a merchant for goods and services based on the cardholder's accrued debt (i.e., promise to the card issuer to pay them for the amounts plus the o ...

s in payment for goods and services. This can be face-to-face, on the telephone, or over the internet. Credit cards have become the preferred method of payment in today's market, making a

merchant account A merchant account is a type of bank account that allows businesses to accept payments in multiple ways, typically debit or credit cards. A merchant account is established under an agreement between an acceptor and a merchant acquiring bank for t ...

essential for most businesses.

Overview

Historically credit card processing services were supplied by banks that were members of the

Visa Visa most commonly refers to: *Visa Inc., a US multinational financial and payment cards company ** Visa Debit card issued by the above company ** Visa Electron, a debit card ** Visa Plus, an interbank network *Travel visa, a document that allows ...

or MasterCard networks. Typically banks both issued credit cards and helped merchants process them, but over time the industry consolidated. Now the industry is dominated by a few large issuers -

Elavon Elavon Inc., formerly NOVA, is a processor of credit card transactions and a subsidiary of U.S. Bancorp. Elavon offers merchant processing in more than 30 countries and supports the payment needs of more than 1,000,000 merchant locations across t ...

, Citibank,

Capital One Capital One Financial Corporation is an American bank holding company specializing in credit cards, auto loans, banking, and savings accounts, headquartered in McLean, Virginia with operations primarily in the United States. It is on the li ...

MBNA MBNA Corporation was a bank holding company and parent company of wholly owned subsidiary MBNA America Bank, N.A., headquartered in Wilmington, Delaware, prior to being acquired by Bank of America in 2006. History The former Maryland National ...

Bank of America The Bank of America Corporation (often abbreviated BofA or BoA) is an American multinational investment bank and financial services holding company headquartered at the Bank of America Corporate Center in Charlotte, North Carolina. The bank ...

, and

Chase Chase or CHASE may refer to: Businesses * Chase Bank, a national bank based in New York City, New York * Chase Aircraft (1943–1954), a defunct American aircraft manufacturing company * Chase Coaches, a defunct bus operator in England * Chase Co ...

. Even fewer banks process credit cards. Banks found that it was not within their skillset to convince every small merchant to accept credit cards, and they began to outsource the selling of such services to small companies called ISOs (Independent Sales Organizations). They also found that massive scale helped reduce the cost of processing credit cards, so they began to outsource processing to a few processors including

TSYS Total System Services, Inc. (commonly referred to as TSYS), is an American financial technology company headquartered in Columbus, Georgia. In 2019, TSYS was merged into Global Payments, Global Payments Inc. TSYS is the largest third-party payment ...

First Data First Data Corporation is a financial services company headquartered in Atlanta, Georgia, United States. The company's STAR Network provided nationwide domestic debit acceptance at more than 2 million retail POS, ATM, and Online outlets for nea ...

and MSI. While some merchants buy their credit card processing services directly from a bank, more typically they get their credit card processing services from an ISO, which is responsible for selling the service to the merchant, providing technical support, processing the transaction (authorizing it and submitting it to the Visa or MasterCard network), bearing the risk of

chargeback A chargeback is a return of money to a payer of a transaction, especially a credit card transaction. Most commonly the payer is a consumer. The chargeback reverses a money transfer from the consumer's bank account, line of credit, or credit ...

(s), and setting the price of the services. If the ISO is small it might outsource some of those services (for example, providing technical support) to a larger ISO. Except for the few very largest ISOs, the ISO outsources the actual processing to a larger company that focuses solely on processing. While each of the firms discussed above provides merchant accounts and could legitimately be called the merchant account provider, in practice the phrase usually refers to whichever organization has responsibility for directly maintaining the relationship with the merchant.

Services

Point of sale (POS) equipment

Point of sale terminals, also known as EPoS ('e' signifying this is an electronic point of sale) may be portable, mobile, fixed, adapted for transactions carried out behind a glass partition, or specially adapted for business-to-business transactions. Portable and counter top terminals are common place in restaurants and retail shops, while mobile (GPRS) terminals are more commonly used by businesses that need to take payment on the premises of the customer.

Purchase with cashback

Cashback allows customers to request cash from the cash register along with the transaction. This cash is debited from their account via the

EFTPOS Electronic funds transfer at point of sale (EFTPOS; ) is an electronic payment system involving electronic funds transfers based on the use of payment cards, such as debit or credit cards, at payment terminals located at points of sale. EFTPOS ...

(

Electronic Funds Transfer Electronic funds transfer (EFT) is the electronic transfer of money from one bank account to another, either within a single financial institution or across multiple institutions, via computer-based systems, without the direct intervention of b ...

at Point of Sale) terminal. This service is of considerable convenience to the customer and provides benefits to the business including increased footfall, impulse buying, and increased numbers of customers due to the added convenience of cashback.

eCommerce solutions

Businesses that sell goods and services via the internet require secure means of conducting the transactions end to end.

Virtual Terminal

Cloud management of payment channels. Invoice, request payment, manage clients payment information and recurring billing cycles,

Anti-fraud measures

Minimizing the risk of fraud both to the client and to the client's customers.

References

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