Merchant account: what is it

Today, no company can succeed without maximizing the power of the Internet. To obtain global reach of users of Internet resources, it is not enough to be able to attract customers and create profitable marketing strategies, one of the primary points is setting up a safe and understandable way for customers to accept payments on their website.

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After opening a company, the second step is opening a bank account for it and connecting a merchant account (which means a merchant in Russian). You will learn more about what a merchant account is and how to organize the acceptance of payments on your site from this article.

What is a merchant account

A merchant is a type of bank account with which a company will be able to accept payments using MPS (international payment systems) Master Card, Visa, American express, etc. After all legal procedures for connecting an online trading terminal that allows you to accept payments online from bank accounts and payment systems, the merchant has the opportunity to receive funds into his account for services or goods directly from his website. Today, the majority of online purchases are made using cards, online sales from 2017 to 2019 amounted to 7%, and another 73% of the world’s population do not use cards for payments. Therefore, the merchant account is not only a popular request from business owners, but also quite promising in terms of business growth for the payment systems and banks themselves.

Merchant account – a commercial account required to receive online payments from a bank card, electronic wallet or other payment method. The difference from the familiar payment terminal is the presence of a “tied” Internet interface and access to online statistics on payments of your store. Such an online terminal allows website visitors to quickly and conveniently pay for services or goods by entering their credit card information.

The process of transferring funds is regulated by the acquiring bank. This is a credit institution that provides the seller company with hardware and software for the possibility of receiving funds to your merchant account.

To process customer payments, it is required to conclude an agreement between the seller, the acquiring bank and the payment card processing center (PCPC). A certain role is also given to the issuing bank, the credit and financial institution that issued the customer’s payment card.

Internet Acquiring Scheme

The interaction between acquiring participants occurs as follows:

  • the client places an order on the site and selects the debit of funds from his bank card as an option for the method of payment;
  • the program automatically redirects the buyer to the PCPC web page;
  • the buyer enters his personal data and bank card details;
  • PTsPK requests permission for the operation from the acquiring bank, and the latter applies to the payment system;
  • the issuing bank receives a request from the payment system;
  • he is convinced of the availability of funds on the card and blocks the required amount, or refuses to complete the operation due to the lack of the required funds on the card;
  • the response is sent in reverse order to the seller’s website;
  • if it is positive, then a purchase is made.


Now that you have learned what a merchant account is, it’s time to talk about the benefits of using it:

  • Make payments instantly around the clock. Any visitor to the site can pay for the order at any time of the day, on weekdays and weekends, so the sales of companies with a merchant account do not depend on whether the banks work or not. As practice shows, the presence of such a payment method on a web resource significantly increases the level of sales and customer loyalty. Another important factor is that the merchant account receives verified resources, which excludes the possibility for everyone to put a payment method on the site, that is, makes the world of payments more secure.

Let’s look at the undeniable advantages of a merchant account:

  • A large number of operations. Using such a payment scheme via the Internet allows thousands of transactions per second.
  • Payment Security. Indeed, if the buyer does not receive the goods or services, then he can send a complaint to the issuer bank and carry out the money back procedure. Therefore, for a client, payment with his card is a more reliable way than, for example, payment with cryptocurrencies or other payment systems.
  • Tax optimization. Opening an account for an offshore company will provide an opportunity to carry out entrepreneurial activities while minimizing control and paying taxes in any country.

The dangers

Along with the pros, the online credit card payment method has its drawbacks. First of all, these are certain risks. They concern both the seller and the buyer.

So, after paying for a product or service through the site, the client has the right to chargeback (chargeback). At the same time, the bank and the Ministry of Railways may impose penalties on the account holder if the number of chargebacks exceeds Visa 1%, Master Card no more than 3%. In order to identify fraudsters who received such a merchant account, employees of the Ministry of Railways use their software, which goes to Internet resources and makes test purchases.

For example, even Google play makes such refunds if the customer made a purchase, but “the product or service does not meet its expectations, or the product does not work properly”.

As for the buyer’s risk, when making a payment, he is identified in the system and the seller can debit money from his account, but this often happens due to the carelessness of the buyers. Since some merchants offer their subscription services. Also, if you fall into a protected resource, there is a chance that the data on your cards will fall into the hands of attackers. Usually in this case you will receive a refund from the bank that issued the card and the store that received the merchant account by fraud will be fined a large amount.


They are distinguished by trading and Internet merchant accounts that differ in the need for the physical presence of a bank card at the time of payment.

The merchant account used to pay for purchases from the card through a POS terminal or imprint is used at offline retail outlets.

An Internet Account is used when making a payment using the remote payment method via the Internet. The buyer enters his card details and makes a payment via the secure PCI DSS protocol. The required amount is sent from his account to the account of the seller.

How to open

Those who are interested in opening a merchant account should be aware that it can be issued only for a legal entity.

To register merchants, banks set specific conditions and make serious demands. In addition, this is usually a rather lengthy process, as the company must provide contracts with contractors, suppliers and show which model the KYC and AML procedures are carried out with the entrepreneur.

From the owner of the company who wants to open a merchant account, you will need:

  • Post policies on working with your clients, privacy policies, and information on how the company fights against money laundering and terrorism in order to prevent account blocking. Therefore, before starting work, the WELLEX PAYMENT team will help bring the site into line with the requirements of payment systems.
  • It will also be necessary to collect all the necessary documents at the request of the bank: information about the beneficiaries of the company, including tax returns and a list of types of business activities.

As a rule, banks contacted by sellers begin a lengthy KYB audit. To speed up and simplify the process of registering an account for a merchant, it is recommended to contact those who do this every day. You can apply for opening a merchant account through our representatives on the site.

Intermediary services and possible difficulties

The task of opening an account is greatly simplified if you act through an intermediary. Today there are many companies offering off-the-shelf service packages. In particular, they provide detailed advice on the preparation of a package of documents and information for submission to the bank, etc.

This is especially true for companies wishing to develop foreign markets and startups. To accept payments from foreign buyers, you need to open a bank account in a bank of another country and connect your website to international payment systems. To solve the first problem, the business owner needs to find a bank that works with the business. Each bank decides what type of business it works with, and therefore the search for the connection of online payments can sometimes turn into a long search, especially if the online merchant is a high-risk business.

Types of merchant accounts

A merchant account can be of three types: Low risk, Medium risk, High risk.

Definition of risk is a very subjective process. The risk level is affected by such parameters as:

  1. Monthly sales.
  2. Frequency of refunds of payments and goods.
  3. Credit history.
  4. Number of accepted currencies.
  5. Country of residence of the beneficiary of the company.
  6. Reviews about the company on the Internet.
  7. Your work experience and more.

The smaller the value of the first three indicators, the lower the risk. For other parameters – very individually. So, for example, the most difficult countries for acquiring are the USA, Canada, Japan.

The following are areas of activity related to a particular degree of risk:

  • Low risk

Marketing, stationery, books, clothes, household goods, toys, educational courses.

  • Medium risk

Travel services, game development, digital content, software, telemarketing.

  • High risk

Forex, online casino, gambling, binary options, medicines, precious metals, charity funds, narcotic drugs, exchangers, dating sites, industry 18+.

Now you know all the pros and cons of connecting to your website a method of paying for orders online. Registering such an account will significantly increase the profitability of your business.

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