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What is a merchant account?

Discussion in 'Business & Tax Advice' started by oneloop, Dec 19, 2014.

  1. oneloop

    oneloop Registered Member

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    Hi guys,

    I'm new in this world. I hear these "merchant accounts" mentioned very often. What are they exactly, and why do you need them?
     
  2. lord1027

    lord1027 Elite Member

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    Merchant Account on what website? BHW?
     
  3. oneloop

    oneloop Registered Member

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    I don't know, that's what I'm asking.
     
  4. lord1027

    lord1027 Elite Member

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    I guess it refers to people who have BST threads opened here. You need to be Jr Vip + pay marketplace fee to be a merchant here.
     
  5. Gosocials

    Gosocials Jr. VIP Jr. VIP

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    "merchant account " its like a bank account connected with your webiste.. So anyone can pay you via website . so this is the use of merchant account......simply its a one of the method of receiving money from website.
     
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  6. oneloop

    oneloop Registered Member

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    Ok SRkrishnan, that's exactly what I was looking for.

    So, how do you get one of these accounts? You walk into the bank and say "I wanna get paid for my website"?
     
  7. BassTrackerBoats

    BassTrackerBoats Super Moderator Staff Member Moderator Jr. VIP

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    A merchant account is an account with a bank/credit card processor that handles any payments to you that are done using a credit card.

    Your bank can probably set you up with one if you are a legit registered business with a business bank account.
     
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  8. oneloop

    oneloop Registered Member

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    Hi BassTrackBoats, thanks.

    Yes, I'm a legit registered business. I don't have a business bank account yet, I'm going to have the meeting to open it up next Monday. So what you're saying is this processor doesn't come with a business bank account by default? I have to specifically tell them I want it? Also, can you tell me anything about the costs involved?
     
  9. BassTrackerBoats

    BassTrackerBoats Super Moderator Staff Member Moderator Jr. VIP

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    It is not a default part of one's business bank account and often one uses a different bank for their merchant account. You would have to apply for one. They look at a few different things as to your rate but if you are a brick and mortar business you should be looking at something under 2% for sure and lower if you take the time to shop around.

    If you have an accountant I would be going to him with some of these questions as he would be able to address your situation and your business in specifics and you really need something more specific than you can typically get on a forum.
     
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  10. oneloop

    oneloop Registered Member

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    Which means I already screwed up, as my accountant isn't coming with me. I'll have to pretend like I know what I'm talking about then.
     
  11. BassTrackerBoats

    BassTrackerBoats Super Moderator Staff Member Moderator Jr. VIP

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    Nah, just call your accountant up on the phone before you go to the bank and get some advice from him/her. They know your situation a ton better than most others and can help you over the phone.
     
  12. oneloop

    oneloop Registered Member

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    That's a great idea, I'll do that, thanks :D

    Another question, why do I need a "merchant account" to receive money? I can receive money transfers on my private account just fine... Is "transfers" different from "payments", somehow?
     
  13. BassTrackerBoats

    BassTrackerBoats Super Moderator Staff Member Moderator Jr. VIP

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    The merchant account is only to accept credit cards. You can receive money transfers and payments without it but not accept Credit Cards as you need a merchant account for that.
     
  14. oneloop

    oneloop Registered Member

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    Ah, got it. So why do people in this forum care so much about accepting credit cards? Is that the norm in the affiliate world?
     
  15. oneloop

    oneloop Registered Member

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    To work with a specific example: say I wanted to receive money from Adsense. Do I need to be able to accept credit cards to receive the money? Or is it just a normal money transfer enough? :)
     
  16. BassTrackerBoats

    BassTrackerBoats Super Moderator Staff Member Moderator Jr. VIP

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    Only if you are selling something do you need to accept credit cards.

    No, adsense, CPA networks, etc all pay via ACH (Bank Transfer) so you would not need one for those kinds of revenue streams.
     
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  17. netdealer

    netdealer Newbie

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    Hi OP.

    Having been working / using merchant accounts for 10 years, I can honestly say that asking your bank for a merchant account would be a lot more costly than going through some of the ISO/MSP providers. There are a lot of different different companies that will can set you up with a merchant account through one of their partnerships with banks or acquirers. You'll find that you can get much better rates than your local bank will offer, and unlike a local bank that may want you to put down a sizeable deposit, going with a company that offers merchant accounts and merchant services means you won't have to put down any deposit at all.. this all depends on the market you plan to sell in, the products you are selling, etc...

    You will need to be a registered business, and you can then apply to any number of companies that will offer you preferential rates. Some as low as 1.85%, even for MOTO (mail order / telephone order / ecommerce) merchant accounts.

    Let me know if you need any more details or any specifics as I didn't want to write a novel here, in case you've already gotten some information elsewhere.
     
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  18. Nochexman

    Nochexman Newbie

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    Which country are you in oneloop?
     
  19. GlobalSolutions

    GlobalSolutions Jr. VIP Jr. VIP

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    MA (Merchant Account) is mainly for credit card processing. In other words, accepting credit cards from clients.
     
  20. kypso

    kypso Junior Member

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    Adsense pays also via check.

    K.