Those involved in the sale of goods and services via the Internet without fail came across, more precisely, all of his sales technology was built on this, with such a concept as a merchant account or a merchant account.
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Before giving him a definition, let’s recall how online payments are made.
A person pays for a product / service using a bank card (debit or credit), using special equipment – POS-terminals or imprinters. The seller or you collects the amount to be paid into them, inserts or brings a card to the equipment, you enter the pin code (it is possible that this is not required) and money is debited.
You buy goods in an online store. Click on the “Buy” button and get to the payment page, where in special windows you enter the number of your card with which payment will be made, its validity period and CVV code. Click “Pay”, a one-time password comes to your phone, you enter it in a special window, click “Pay” again. If there is enough money on the card and there are no prohibitions on it, money is debited and it is considered that the goods have been paid for, and the seller must send it to you.
In these two options, money is debited from the card. Where to? To the seller’s card? To his bank account? No! The money is first transferred to the merchant account (merchant account) or, in another way, to the merchant account of the seller.
What is a merchant account and its benefits
This is a special account designed to accept payments from bank cards Master Card, VISA, Maestro, American Express, Mir (possibly other systems), as well as directly from bank accounts. The merchant account is tied to the seller’s bank account and directly transfers money to it.
The question may arise: “Why do we need this account, is it an intermediate link? Why can’t money be transferred directly, directly to a current account? ”
The intermediate link is introduced for two reasons:
- To increase security. The seller does not need to show the number of his current account on the Internet, thereby increasing the risk of breaking it.
- It is technologically more convenient to organize the reception of various payments to a special account, and already from it to transfer money to the main account.
- To simplify the procedure for a refund in case of chargeback (more on this below).
- The bank does not charge interest on the money held in the merchant account.
Advantages of a merchant account:
- Online sales can be conducted 24/7, regardless of the geographical location of the seller and buyer.
- Payment operation takes a few seconds.
- High security.
- Reduction of taxation due to the opening of merchant accounts in banks of offshore zones.
- You can view and analyze information on payments and payment attempts.
The scheme for accepting online payments to a merchant account
In the online payment transaction, in addition to the buyer and seller, several organizations are involved:
- Acquiring bank – a bank that opens a merchant account for the seller and assigns it a special code – merchant id, which is necessary to link the seller’s bank account to this account.
- Issuing bank – a bank-holder of a buyer’s card with which funds are debited.
- Processing center – a company that provides technical support for online payment, linking the buyer, seller, acquirer and issuing bank.
Technically, online payment is as follows?
- After the buyer clicks the “Pay” button, the processing center redirects it to the page of the payment form.
- After filling it in, the processing center sends all information about the upcoming payment (customer card number, validity period, CVV code and the amount debited) to the issuing bank.
- If everything is in order, the issuing bank gives confirmation and the processing center sends this confirmation to the acquiring bank, which accepts the money for payments to the merchant account of the seller. Directly to the seller’s bank account, money from a merchant account is transferred with a certain delay in time. This is bank insurance, so that without much hassle, money is returned to the buyer if he mistakenly made a payment or was not satisfied with the goods. Each bank sets the delay period individually.
- The processing center notifies the buyer and seller that the payment has taken place.
Types of merchant accounts
Depending on whether a bank card is used when conducting an online payment or not, there are two types of merchant accounts:
- Trading merchant account. It is created for accepting payments of debited cards using imprinters or POS-terminals. They are started by owners of offline stores.
- Online merchant account. It is created to accept payment from customers’ bank accounts without using a bank card. The owners of online stores, forex brokers, all kinds of social networks, dating sites, online casinos, cryptocurrency exchanges, etc. are used. Such a merchant account is most in demand.
Opening merchant account
A merchant account opens with an acquiring bank. Only a company (legal entity) can be the owner. Depending on the bank, the requirements for it may differ slightly, but in general they are as follows:
- The presence of a current account for the receipt of money from a merchant account.
- Providing the constituent documents of the company – the charter, license, memorandum of association, certificate of registration. It should be said. that a number of banks refuse to open merchant accounts for owners of high-risk businesses – online casinos, the sale of alcohol and tobacco products. Firstly, due to the high probability of contact with law enforcement agencies. Secondly, due to chargeback – a refund at the request of the buyer. This process is regulated by payment systems Master Card, VISA, Maestro, American Express, Mir. According to them, the proof of the wrongfulness of the chargeback rests with the seller. To carry out the return, the bank is forced to spend its technical and human resources (use equipment and its staff), which is why some financial institutions refuse to customers who are highly likely to chargeback.
- Providing a credit history.
- Geography of activity.
- The average volume of goods sold per year.
- Amount of the average bill.
- The presence of a site through which Internet trading will be carried out, which must meet all the requirements for payment security.
- Provide personal information to company owners.
- Describe in detail the company’s policy on the return of funds, that is, on chargeback.
Google merchant center
A year ago, Google launched its next application, the Google Merchant Center, with which you can easily post and edit your products in Google Shopping. But the classic merchant center and Google merchant are completely different concepts. In the first case, it is a tool for receiving payments. Secondly, it is a tool for a more effective sale. Merchant Google does not accept payments! If you made yourself a Google Merchant Center, then for online trading you need to get yourself a merchant account in one of the banks. This does not need to be done only if you are selling goods through some kind of marketplaces, in which payments are accepted to sellers’ accounts. For example, Amazon, Ebey, etc.
Benefits of creating a merchant account with Wellcoinpay
We have been working in the financial services market for many years. Turning to us, you are guaranteed to get a quality product that has many advantages:
- High reliability.
- The ability to integrate with the site with any CMS.
- The solution for everyone. We will help you get a merchant account, even if you only sell handicrafts to order just a few times a month.
- We work with a high-risk business – High risk merchant: forex, games, alcohol, medicines, tobacco, weapons, gambling, bookmakers, etc.
- We offer unique products, including receiving payments using cryptocurrencies.
- Global coverage. We will develop a solution for accepting payments from cards of any bank in the world.
- No chargeback.
- All inclusive. Full turnkey development. After our work, you can immediately accept online payments.
Our solutions work successfully in 180 countries, in hundreds of companies. For us, the merchant is a thoroughly studied area of financial services in which our specialists are world-class experts.