Important Terms Used in Connection with Opening and Operating a Merchant Account

Know the different terms used in opening and operating a merchant account.

Merchant accounts provide e-commerce businesses more flexible ways of transacting payment processes as well as expand their market and increase cash flow as well. This convenient and hassle-free since it allows cashless transactions for customers to be able to purchase their desired product and services without having to bring large amount of money in their pocket.

Opening and operating a merchant account is so easy if you just know the basic terms as well as know how to handle your business carefully.

Authorization

This is the process wherein the issuing bank approves a certain amount to be debited from the credit card amount into the merchant account's bank.

Authorization Code

This is given by the credit card holder for a certain payment transaction to push through. This should be kept safe by card holders since this is one vital information for approval of future payment transactions.

Authorization Fee

This is paid to the merchant account provider for communication for each transaction as well closing a batch of such voids, sales and credits.

Batch Processing

This process involves transactions to undergo "batch out" which is to be collected by the account processors and debit authorized amounts from the credit card accounts. This can be in a daily basis or depending on the merchant account holder.

Card Issuer

The card holder whose name is printed or embossed infront of the card and in some cases pictures are printed together with the card design.

Chargeback

This process involves a certain product which was being disputed by a merchant's customer that needs to be debited back from the merchant account's bank to the card issuer's account. Disputes would take about 10 banking days before it is resolved and a chargeback is being done from the merchant account to the credit card account.

Credit Card Processing

This involves authorizing certain agents or certain payment transactions by the merchant for an amount being paid by the customer through his credit card.

Credit card processors

These processors handle certain transactions for online payments such as issuing voids and sales for merchant accounts, storing credit card data and information for sales references as well as inputting data for specific credit card transactions for merchant accounts.

e-Commerce

This stands for Electronic commerce which holds all buying and selling industries in the Internet. Customers can choose a variety of goods and services through a merchant account's website then he can put these items into the shopping cart to be transacted for credit card payments. Online payments are then processed by authorized payment gateways such as Authorize.net.

Gateway

This send out information from the shopping cart into the credit card processor to be authorized by the merchant account to push through.

Internet Merchant Account

This is a business relationship between merchants and their financial institutions for the former to be able to accept credit card payments online.

Merchant account provider

This allows merchants to accept credit card payments online, face-to-face or through telephone.

Merchant Accounts

This entails certain features that allows merchants and other retail business companies to be able to increase their cash flow through accepting credit card payments for their products and services.

Payment gateway

This is an e-commerce feature which authorizes online payment through credit cards, validates the data and information, then send it back to the merchant account for the amount to be debited from the credit card account.

Payment Processor

It processes payment procedures from the credit card account to the merchant accounts bank.

Shopping Cart

It holds a lot of features for easy online shopping for customers and clients in the Internet. Chosen goods and products are placed in the shopping cart to be processed and then once payment has been made it will be shipped immediately to the card issuer's address.