4 Types of Merchant Accounts You Should Know About

 In today’s time, businesses are using a variety of solutions to boost revenue and increase customer services. Merchant account is one of them which has become very important for every business. Integrating this account, businesses can easily accept payments by credit or debit card. Funds from the credit or debit card sales are deposited into the merchant account and then transferred into the business account.

Today, there are a variety of merchant account types to choose from. However not all of these accounts are created equal, so it is important that you understand the different options and which type will be best for your business. 

Here we will discuss the four main types of merchant accounts:

Traditional Merchant Account

It is a type of bank account that allows businesses to accept payments by card. When a customer pays with a debit or credit card, the corresponding funds are transferred from the account held by the card-issuing bank to the merchant account. This system is often used as an alternative to accepting payments via cheques or online bank transfers and can be more cost-effective than using third-party processors such as PayPal.

E-Commerce Merchant Account

This type of account allows businesses to accept payments from customers via any electronic payment method. E-commerce merchant accounts can be setup with either a traditional bank or an independent payment processor. A merchant service provider is often specialized in providing e-commerce merchant accounts, offering a range of features and services that cater to this market segment.

Merchant Aggregator

The types of merchant solutions are typically used by established businesses. A merchant aggregator, the third type of merchant supplier, is created for various types of businesses that are more informal, just getting started, or unable to register a merchant account with a bank.

High-Risk Merchant Account

This account is designed for businesses that have a higher than normal chance of going into debt. This can be due to a number of factors, such as the industry that the company operates in or the amount of credit card transactions that they process. Because of the increased risk, these accounts often come with a variety of fees and higher interest rates.

It's important to research your options before signing up for one of these accounts.