The Ins and Outs of a Payment Processing Merchant Account

Dec 19, 2022

Learn All About a Payment Processing Merchant Account

Small businesses today need a way to accept credit card and debit card payments. These payments enable them to sell products and services online and in person. Some even offer the option for partial payments and invoicing. A merchant account is an arrangement between a business and a card-processing company. This merchant account provides businesses with the ability to accept credit cards, debit cards, e-checks, and other forms of payment. A payment processing merchant account has many benefits for businesses of every size, and in any industry.

Why businesses need payment processing merchant accounts:

Businesses need the ability to accept payments in any form. Modern businesses don’t always interact with their customers in person. There are more online merchants than ever before and more customers who use credit cards or debit cards to pay for goods and services. This means that businesses need the flexibility that payment processing merchant accounts afford them. They can use them to accept payments online, get paid when they run high-risk businesses, and even offer the option for their customers to pay with e-checks in person or online. Businesses need merchant accounts if they want to grow and thrive.

What is a payment processing merchant account?

A payment processing merchant account is a type of bank account that allows you to accept payments. It connects the payment gateway and the merchant account. A payment processor merchant account allows a business to both accept payments and then processes the payment to take the money from the buyer to give it to the seller. This can be done in person, over the phone, online or through mail order catalogs. It’s also used by many businesses as a way to process credit cards and debit cards.

Merchant accounts are different than regular bank accounts because of the way it lets you process payments with credit and debit cards.

What’s the difference between a payment processor and a credit card processor?

A payment processor is a company that provides services to businesses that need a way to accept payments. They handle the transaction details and process all types of credit cards, debit cards, prepaid cards, electronic checks, and cash. A credit card processor is similar, except they only accept credit cards like Visa, Mastercard, Discover, and American Express. They do not process electronic checks, nor do they handle cash transactions.

What security measures do payment processing merchant accounts offer?

Payment processing merchant accounts include the following security measures and more:

  1. Encryption technology.  This encrypts information into a different form so it cannot be stolen by hackers who may try to access your resources while they’re being transmitted across the internet.
  2. Real time authorizations. These are where an authorization request is sent directly from one party, in this case the customer, to another party, you as the business owner.  
  3. Monthly Statements. These reports show all charges made against each transaction item. It can be used to detect errors and other issues in the system.

What kinds of businesses can use a payment processing account?

Businesses in almost every industry have access to payment processing accounts. However, some merchants will not open accounts for high-risk businesses. Vendors like EMerchantBroker help by offering options for businesses in these industries. Businesses with a lot chargebacks or very high monthly volumes may get flagged as high-risk. Additionally, when companies have businesses selling goods and services in the following industries, they may also require a different payment processing account:

  • Ammunition, firearms
  • Adult services
  • Casinos
  • Online gambling
  • Natural medicine
  • CBD shops
  • Industries with recurring payments

How does the credit card processing merchant account work?

A credit card processing merchant account works by taking the funds from a customer’scredit card and sending those funds to the merchant. This process is called authorization, and it happens in two parts:

  1. Authorization. This is the step where the merchant account officially sends a request for payment to the payment processor. During this step, the money is put on hold in the customer account to be paid to the merchant.
  2. Settlement. Settling happens last and is after the money has been verified and the fee has been paid by the merchant for the transaction. The settlement is the actual movement of the predetermined amount of funds into the payment processing merchant bank account.

How long does it take to receive funds from payments processed through a merchant account?

It’s important to know the time frame in which you’ll receive funds from your payment processor. This is especially significant for companies that rely on cash flow or have tight budgets. A delay in payments can prevent them from having enough money and cause disruptions in business operations.

There are a few things to consider when determining how long it takes to receive funds:

  • The type of card used by the customer. This factor can also impact the cost of the fees associated with the transaction.
  • Whether or not there are any holdbacks placed on your account.
  • How much congestion exists within the payment processing system at any given time.

Which companies provide payment processing merchant accounts?

When looking for a payment processing merchant account, you’ll likely come across a variety of names and terms. Most people are familiar with Venmo, Paypal, Stripe, and even Square when it comes to payment processing merchant accounts. While these can be great for businesses just getting started, in low-risk industries, or who have a low volume of transactions, there are much better long-term options like EMerchantBroker to consider.

The transaction fees of other payment processors can be a deterring factor when it comes to getting a merchant account. Additionally, some require a minimum or maximum number of transactions. Others may even hold funds if a payment is made over a certain amount. While this can help limit the risk of fraud, for businesses that rely on the cash will be disappointed when they use other vendors for their payment processing.

Using a more comprehensive account for payment processing can help you pay lower fees per transaction and even helps you gain access to merchant accounts when you have a high-risk business.

How do I get started with a payment processor merchant account?

Once you decide on a company like EMerchantBroker for your payment processing needs, you will need to submit an application. The process can take a few days or more depending on the industry you are in, how much information you provide, and how old your business is. It’s best to provide as much information as possible in the initial application so that the company can quickly review it and get back to you. Your business will be assigned an account manager who can go through all of the options and help you get your account set up.

Apply for a payment processing merchant account today!

Running a business is amazing but deciding on all of the different vendors and service providers that help your business run can be overwhelming. One of the most important things you need is a way to accept payments, and if you’re in a high-risk industry, this can be tricky. Regular online payment processors limit the types of businesses they’ll do business with. This is why many companies choose EMerchantBroker. Not only can they handle the large volume of transactions from busy companies, but they can also take on businesses that are considered high risk. Contact our team today to find out what options are available for you.

Let us help you get a high risk merchant account today!

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Having a merchant account allows an account holder to take advantage of merchant cash advances. When a merchant is approved for an advance, the business agrees to receive a lump sum of cash in exchange for an agreed-upon percentage of future credit card sales.

Pricing varies depending on the merchant’s industry, past credit card processing history, the type of business seeking the account, average ticket sales, and average transaction volumes.

Yes, EMB works with merchants who are building their credit, as well as those who have poor credit. EMB also approves merchants that have no credit card processing history and businesses that have lost their merchant accounts due to high chargebacks.

Several factors influence a merchant’s risk level. Though only one factor likely will not get a merchant classified as high risk, a combination of these may: business size, location, and industry, credit score, credit card processing history, a industry’s reputation for excessive chargebacks, a prior history of high chargeback ratios, and whether a merchant exclusively sells online.

Virtual terminals are stationed on a merchant’s website, making it easy for customers to make a payment or purchase online. Merchants or a payment processor can easily set up virtual terminals, so online businesses can accept credit and debit card and e-check transactions.

A merchant account is a business account with an acquiring bank. Without this business account, which actually works more like a line of credit, a merchant cannot accept and process credit and debit card transactions. Businesses need a merchant account to accept major credit cards via a static point-of-sale terminal, mobile card reader, or through a virtual payment gateway.

After filling out EMB’s simple online application and submitting any necessary, requested documents, many merchants get approved within 24 and 48 hours.

EMB specializes in working with high-risk merchants. EMB works with many merchants, including but not limited to businesses in these industries: gambling and gaming, adult entertainment, nutraceuticals, vaping and e-cigarettes, electronics, tech support, travel, high-end furniture, weight loss programs, calling cards, e-books and software, and telecommunications.

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