You normally work to earn some cash that can be used for your living. But it is not all the time that you have enough cash to spend on the things that you need and this is when a debit or credit card some in handy. If you will be able to pay a certain product or service through credit, you will normally take advantage of it rather than paying it in cash. This is the reason why merchant accounts are very useful for a lot businesses knowing that not all people bring cash when they purchase a product or a service. There are basically three types of merchant accounts that are commonly used by different types of businesses – retail, mail order/telephone order and internet-based merchant accounts.

The first type of merchant account which is the retail merchant account refers to those that department stores, shopping centers and grocery stores use. This particular type of account is usually associated with lower cost/fees but there are some conditions and requirements that must be observed. For instance, when you are using a retail merchant account, your business will be required to swipe majority of the credit card sales on the credit card terminal. This wouldn’t be a big problem since because almost of all of the sales transactions are made in the store. However, this particular type of account requires you to have an actual credit card terminal which can cost up to hundreds of dollars, including a receipt printer.

Mail order/telephone order merchant account on the other hand is the type that is often used by companies/businesses that accept orders and transact through mail or telephone. These are the companies who usually sell their products using televisions and catalogs. In this particular type of merchant account, the customer will provide the necessary debit or credit card information and the person taking the order will enter the information into the computer for processing.

The last type of merchant account which is the internet -based merchant account is similar to the second type. The customer will not be able to actually swipe the credit card into the card terminal because the transaction is done online. But unlike the mail order/telephone order merchant account, customers do not have to provide their card information to anyone because they can key them all in on their own. This is the most convenient type of merchant account that customers prefer to use because they will be able to do the transaction at their most convenient time.

All these merchant account types are associated with transaction fees and discount rates which may vary. For the retail account, the transaction fee is about 25 cents while the discount rate is 1.85 percent. For mail order/telephone order account on the other hand, the transaction fee is about 35 cents while the discount rate is at 2.65 percent. And lastly, for the internet-based account, 35 cents is the transaction fee while discount rate is at 2.65 percent. But all these information were as of year 2010. There might have been some changes now.

Author Bio: Stephen Mcmilla enjoys writing for CanadaCardProcessing.com which offers merchant services and ATM machines as well as a host of additional services.

Category: Business
Keywords: merchant account,bank account,checking account,credit cards,business checking account