A merchant account is a special type of bank account. This account allows your business to accept credit and debit card payments from a payment processor. It should be noted that merchant accounts are often referred to as MIDs (or Merchant IDs). When a transaction is cleared at the payment processor, the funds can then be deposited into the merchant’s account. From there, they can be transferred to your company’s main bank account.
The difficulty with merchant accounts is that it is not always easy to get approved for one with your bank because of online gaming merchant account high risk involves. The paperwork is heavy and the requirements vary greatly from region to region. Various companies, financial institutions and banks offer merchant accounts. However, the options available will mainly depend on your country and location. Research your local market before choosing a merchant account if you really need it – like I said in many cases you don’t – you can get your payment processor handles all the work.
Although it is not a payment processor as such, we also recommend that you register for it. Transfer Wise if you are going to be dealing with a payment processor and especially if you want to accept payments in multiple currencies. In such a scenario (accepting multiple currencies), you will usually lose a considerable amount of money in the form of different conversion fees when trying to withdraw funds. This is where Transfer Wise comes in. Transfer Wise provides you with local bank details for the UK, Eurozone, Australia, and the US. And you don’t need a local address (which is usually a serious problem if you want to get these accounts yourself).
Yes, many payment processing and gateway companies provide merchant accounts as well. The only downside is that there will be an additional charge when you try to withdraw your processor funds into your normal trading account. Talking about that:
Alternatives to a merchant account
Like I said, you don’t need to have a merchant account to effectively operate your online store. In fact, you can collect payments from your customers and then deposit them into your normal business bank account without a merchant account. To do this, you need to sign up with a payment processor that offers this type of service.
As you can see, these are the “usual suspects” again. These companies offer the whole package – from the payment gateway, to the payment processor, to the complete payment processing system. By choosing one or the other, you meet all of your store’s payment processing needs. A customer walks into an online store, finds an interesting product and decides to buy it using their credit card. They click on the Buy button and wait a few seconds. As these seconds pass, the following steps quickly occur:
Customer’s personal and credit card information is sent through the payment gateway. The transaction details are securely transmitted from the gateway to the payment processor, referencing the merchant ID number and transmitting the transaction details from the merchant account. As you can see, all three processes (Gateway, Payment Processor, and Merchant Account) are used in this step.