Why you need a merchant account?

A merchant account is a type of bank account that provides the conection between the
merchant, the payment service provider and the acquiring bank. Before we explaine why you
need it, we'll show you how it works. Basically, it helps you to accept credit cards payments
online. An issuing bank issuers a credit or a debit card to a card holder.

Every single major bank has what is known as an acquiring bank, which is basically the
financial institution backing the money. Each one of these acquiring banks is capable of
issuing a merchant ID which allows you to begin accepting credit cards in your business, and
this bank authorizes or declines each individual customer transaction. Merchant accounts are
unique accounts which are set up specifically for each merchant, and no matter where you go
to open up a merchant account, you will be assigned a merchant ID. A merchant ID allows
your business to be identified by the banks and credit card institutions, in order to accept
credit card payments on behalf of your business, regardless of which type of services or
products you are offering.

If you're opening your business and start accepting credit or debit cards than you need to sign
up for a merchant account. You need it because it allows to legally accept and process to all
online payments methods. It provides safe payment options, protect sensitive data, prevent
fraudulent transactions and protect yourself from chargebacks. Securitiy might be the most
important thing that a merchant account gives you. Especially in the world of mobile
transaction. Some people are worried about security of merchant accounts, but you can use
their sistem amd their secure form to do this automaticly so you don't have to worry about
getting a secure server, they will do most of that for you. If you have a merchant account
you're getting payed faster and quicker so you can reinvest your money to your business or
pay your bills in time and you can't do it if you're getting your money on a monthly basis.
With a dedicated merchant account most of the time will get your money in about 2 days.
That means 2 days after the sale on your website, the money will be sitting in your normal,
business bank account. With an aggregate merchant account it will usually take longer. For
example, Stripe holds your money for 7 days before transferring it into your bank account.
Paypal will hold your money in your Paypal account indefinitely until you either spend the
money by paying for something with the money in your Paypal account or you request the
money to be transferred to your bank account. Once you request the money to be transferred,
it takes about 5 business days to arrive in your bank account.

Also if you pay with your credit card, your terminal can be your smartphone. All you need is a
credit card reader that attaches to you phone. In that way, paying with merchant account is
simple and fast. The credit card reader allows you to accept credit card payments anytime,
anywhere.

I't s good to have a merchant account, especially if your sales volume reaches a certain
amount. A merchant account will deposit money promptly and that's one of the things you
can't have with some other accounts. So, if your business rely on good cash flow, ther's no
need to be afraid of the risk of frozen accounts and delayed payment. However, allowing your
customers to pay via credit card will definetly increase sale. If you only accept cash you're
missing out on sale big time. To be honest, accepting payments directly also promotes
credibility and that's always a good thing when you growing a new brand.

The thing is, when you're dealing with something as crucial as your company's cash flow, you
should do the research to make sure that account you're depending on is right for you.
Understand your account before you start with selling and find out all the informations which
could be important to you. Otherwise you could end up with closed money account.

A merchant account will provide you a faster and more effective sale.