What is Merchant Account service?

11 Mar 2022 By PAYCEC

When a credit card or debit card transaction is processed, the following procedures are taken:

1. A payment gateway is used to complete the transaction.

A payment gateway is a distinct system from a merchant account that checks to determine if the cardholder has enough money to complete the transaction. A payment gateway is required if your firm accepts credit card payments over the phone or through an online portal: A keyed-in or card-not-present transaction is completed online with the help of a payment gateway that connects to the credit card company.

2. The customer's account gets debited with money.

If the transaction is accepted, the merchant account deducts the purchase amount from the customer's bank or credit card account, after deducting the transaction charge, which is normally 3% to 5% of the total. The fees differ based on the method of payment. For example, transaction costs for American Express are often greater than for Visa or Mastercard.

3. Funds are transferred to your business account.

The money is then deposited into your company's bank account by the merchant account. Instead of being made immediately after a transaction, these deposits are normally made in batches at the end of the day – or even less often.

4. Customers have a problem with the purchase.

If a client disputes a transaction, the merchant account will need to pull transaction data to verify it. There is usually a charge for this. If a refund is necessary, the merchant account provider will handle it, taking money from your account and placing it into the customer's one. Often, there is an additional charge for this stage.