Definition of a Merchant Account
A merchant account is a special account that allows merchants to accept credit cards. They are offered by banks, credit card companies and other merchant service providers. There are a number of types of merchant accounts available, depending on your business model and where your business is located.
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Benefits of a Merchant Account
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Having a merchant account and accepting credit cards can result in increased business, credibility and customer satisfaction. Customers are often more likely to spend more or make bigger purchases when using credit cards.
Requirements
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To qualify for a merchant account, you will need proof of your business, including your vendor's license, business license or other documents, and an Internet gateway. Merchant providers may refer to your credit history before approving your account.
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Merchant Rules
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Once you have a merchant account, you will be required to abide by merchant rules. Failure to do so may result in being reported to the credit card company.
Types
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You can choose from an Internet, high risk, retail, offshore or high volume merchant account, depending on your business (and volume).
Fees
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With a merchant account, you may incur transaction fees, monthly fees, discount fees and upfront fees. Shop around to find the best merchant account for your business (see Resources).
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