A merchant account is a facility established by a bank that routes money from credit card sales to a merchant account and holds it there before transferring it to a business’ own account. Any merchant who wants to accept credit card orders must establish a merchant account. Internet merchants need a “Card Not Present Merchant Account”. This process is fully automated in eCommerce transactions. Money may be transferred into standard business accounts in real-time or during various points in a 24 hour period. An Internet merchant account is a crucial part of the eCommerce process.
In order to accept credit payments through a website, various interlinked components are required. There are, in essence, three touch-points between a bank account and that a paying customer. These include:
- The Payment Gateway: Essentially a code that transmits a customer’s order, the payment gateway allows anyone to accept a customer’s unique billing information (credit card number, expiration date, payment amount, etc.).
- The Internet Merchant Account: This is a merchant account which allows anyone to accept credit card payments from a customer via a financial institution or bank.
- The Website: It is absolutely imperative that the website is integrated with the service providers in order to ensure smooth transactions.
The merchant agreement typically contains the respective rights, warranties and duties with regard to accepting bank cards like Visa or MasterCard. These duties often help to reduce fraud and buyer/seller misunderstandings.
Visa and MasterCard require that a website contains the following information:
- A complete description of the goods and services offered
- A return/refund policy
- Customer Service contact details, including a physical address, e-mail address, as well as telephone and/or fax numbers
- Transaction currency – e.g. South African Rand (this is limited to one currency per website)
- Export restrictions (if known)
- Delivery policy
- Country of domicile – e.g. South Africa