Mastering Merchant Accounts

Small Business Merchant Account - Complete Controller

Merchant accounts are bank accounts for businesses that enable them to accept debit and credit card payments. They are agreements between three parties (retailer, payment processor, and merchant bank) to settle credit and debit card transactions.

The process concerning the transfer of funds is simple. First, the payment will be deposited into the merchant account. From there, they shift into the bank account owned by the business. This transfer into the business account can occur daily or weekly, depending on whether the merchant bank provides the merchant account services.

Having an Internet merchant account is necessary to start an e-commerce business that accepts credit card payments.

Cubicle to Cloud virtual business
Getting a Merchant Account

Getting a merchant account is not that simple. Many factors come into play when you apply for one. Merchant account providers must minimize their risks. They look at a variety of things before approving your merchant account. Here are some questions that give you an idea of what information the bank will look at.

  • Does your business have a high risk of credit card fraud?
  • How long has your company been operating?
  • Is there an event in your business’ history worth taking note of? (e.g., Bankruptcy, Default)
  • Does your business have any other merchant accounts?
  • How is your personal credit history?

Getting approval for a merchant account from a bank that holds your business and personal statement is easier.

If your answers to the questions above do not look favorable, your account may still be approved. However, the merchant bank will likely charge higher transaction fees to ensure risk. However, that high fee can then be renegotiated later when the business has a better standing.

Complete Controller. America’s Bookkeeping Experts
Internet Merchant Accounts

An internet merchant account is specifically used to hold and transfer funds originating from online credit card transactions. These accounts usually have a higher fee than a standard merchant account, as Internet card transactions are more risky.

Internet card transactions include one more thing: a payment gateway that authenticates credit card information, just like a POS machine does in a retail store. The payment gateway forwards the transaction information to the credit card company, which then authorizes the payment. Furthermore, some merchant banks offer a solution that eliminates the requirement of having a separate payment gateway.

You must know that you will need a separate Internet merchant account for the different types of cards you want to accept. Getting your internet merchant account through a third-party provider, including Moneris, PS iGATE, or Internet Secure, is more convenient.

The Structure of Fees

There are many different types of fees attached to merchant accounts. Some may be mentioned in the contract, and other expenses might not be mentioned. Here are a few that you should expect:

  • Setup Fees
  • Application Fees
  • Discount Rate
  • Monthly Fees
  • Per Transaction Fees
  • Credit Card Terminal Rent
  • Cross Border Fee

Excessive fees might hurt your business margin, so it’s essential to compare the fees you must pay for your business’s merchant accounts. However, carefully reviewing merchant account contracts can help you avoid minimum-term agreements, which may require a cancellation penalty.

CorpNet. Start A New Business Now
Alternatives to Merchant Accounts


This service offers a complete solution for online transactions. If you use PayPal, you can avoid several fees by only paying on a per-transaction basis. Moreover, you can also use it to improve your margin, which gets smaller and smaller due to the extra fee associated with utilizing internet merchant accounts.

However, you can place a PayPal pay button on your website’s checkout page. You can also use the Website Payments Pro option, which offers a more professional payment interface for your e-commerce website.

Credit card reader

These are devices that connect to your phone to carry out transactions. Offered by various service providers, they are ridiculously cheap (or even free) and charge a reasonable per-transaction fee.


In conclusion, understanding merchant accounts is crucial for businesses to facilitate debit and credit card payments. Businesses can optimize their financial operations and enhance customer convenience in the ever-evolving commerce landscape by carefully considering factors influencing approval, navigating fees, and exploring alternatives like PayPal and credit card readers.

Download A Free Financial ToolkitAbout Complete Controller® – America’s Bookkeeping Experts Complete Controller is the Nation’s Leader in virtual bookkeeping, providing service to businesses and households alike. Utilizing Complete Controller’s technology, clients gain access to a cloud platform where their QuickBooks™️ file, critical financial documents, and back-office tools are hosted in an efficient SSO environment. Complete Controller’s team of certified US-based accounting professionals provide bookkeeping, record storage, performance reporting, and controller services including training, cash-flow management, budgeting and forecasting, process and controls advisement, and bill-pay. With flat-rate service plans, Complete Controller is the most cost-effective expert accounting solution for business, family-office, trusts, and households of any size or complexity.ADP. Payroll – HR – Benefits