Terms To Know If You Plan To Open A Merchant Account

Terms To Know If You Plan To Open A Merchant Account

What is the first step to being initiated when you are planning to venture into a business and make your products available on sale either through an E-commerce site or in a physical store? To open and activate a merchant account exclusively for receiving payments and settle payments. The customers in the current world are inclined more and more towards online payments irrespective of whether the items are purchased through the internet or from the brick and mortar center.

It, therefore becomes crucial for your smooth operation that an efficient merchant account is attached with your business and here are some terms associated with the same, in the context of usage:

 

Merchant Account Provider: The bank or the financial institution that provides a merchant account to the merchant for settling card transactions and online payments.

Merchant agreement: The account is usually opened by the completion of a merchant agreement between the account provider and the merchant and sometimes the payment processor or marketing organizations also form a party in the agreement. Once the agreement has been made effective, the merchant has to abide by the regulations issued by the card association authorities.

Payment Gateway: The secure channel for the transfer of payments to the merchant account from the card account holder who carries out the purchase. Payment gateways can also handle digital currencies, provided they are not affected by any QProfit System scam.

Payment Processor: The financial institutions that work in the background to process the payment authorizations back and forth between the bank and a merchant account through the payment gateway in such a way that the security of the transaction is maintained.

Point Of Sale: The point at which the total billing amount for a purchase is calculated and an attempt is made to pay off the bills usually through a virtual terminal by card swiping or manual key entering.

Credit Card Terminal: The independent electronic equipment on which a card is swiped for making payments or details are entered through keys on its keypads. Some stand-alone machines may have a small printing machine attached to them.

ARU: ARU stands for Automated Response Unit and is a method in which the manual method of entering the keys for validating a card transaction is completed through telephone lines or mobiles.

Discount Rate: The charges to be paid by the merchants in the form of fees, bills, taxes, dues, network charges etc for maintaining a merchant account.

Basis Points: The basis for calculating discount rates which are 1/100th of a percentage point.