What is a merchant account?

Accepting and processing online credit card orders requires a merchant account. Every online payment made with a card involves the transfer of funds to a merchant account, which the merchant holds directly with a bank. Funds can later be transferred to another business bank account.

In basic terms, a merchant account is a type of bank account that allows businesses to accept payments made by credit and debit cards.  The merchant account is for the settlement of payment card transactions.  When a customer inputs their credit card information to purchase goods or services from your online store, your payment gateway– the software that connects the merchant to the processing networks – formats the data and sends it to the merchant’s bank processor.

The merchant bank’s processor submits the details to the credit card network (Visa and MasterCard interchange) which routes the transaction to the bank that issued the card.

The issuing bank approves or declines the transaction and passes the transaction results back to credit card interchange. The network then sends results to the merchant bank’s processor and the processor relays the results to the gateway.   The gateway sends the results to the merchant showing approval or decline. The merchant provides a real time response to the customer. The issuing bank then sends the funds to the credit card network, which passes those funds to the merchant’s bank. Then the bank deposits the funds into the merchant’s “merchant account.”

All of our solutions at FAC are for direct merchant accounts with banks around the world. We customize multi-currency, online credit card processing solutions for a variety of merchants covering many industries such as travel, retail, ISPs and technology services, utilities, education, and social gaming. 

Setting up a merchant account can take anywhere from four weeks to eight weeks, depending on a merchant’s willingness and speed in providing their supporting application and account opening documentation. Merchant accounts require an underwriting process and merchants must provide all KYC documentation before the bank can approve you for an account. Merchants will also need to sign the relevant contracts (bank and gateway) and, once approved, a merchant’s developers will have to integrate the website to the gateway platform.

Our range of solutions offers merchants the opportunity to process payments in a multitude of currencies. Merchants can price their products and services in up to 150 world currencies with settlement to Euros or in up to 145 currencies with settlement in US dollars. With multi-currency processing, merchants can afford greater market reach and expand their business beyond geographical boundaries.

If you’re an established company looking to enter the world of online trading for the first time or if you’re looking for an alternative merchant account with a different provider, we’d love to hear from you.



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