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Getting
a Merchant Account
A merchant account is a relationship with a bank
that allows your business to accept credit cards. You
accept payments for your products or services via credit
card, the bank debits the funds from the customer and
deposits them into your bank account.
Typically, there is a processor (3rd party) that
is involved that processes the actual credit card information.
This can be the terminal that you're familiar with
at retail stores, an internet based utility, phone-based
charging and computer software.
The actual credit card companies make money by taking
a small percentage of each transaction. The 3rd party
processing companies make money by charging a per-transaction
fee and monthly maintenance fee.
Obtaining Your Own Merchant Account
Obtaining your own merchant account used to be a
complicated process that required you to have been in
business or have substantial assets. Typically, you
would have to apply directly to a bank.
This situation has changed dramatically in recent
years. There are now Merchant Account Providers
(MAP's) who have an existing relationship with
a bank. This allows you to apply to them directly and
the approval rates are much higher. In fact, Merchant
Account Providers typically have approval rates of 98%
or higher and specialize in new businesses.
In addition, they will provide you with the method
of processing the card: terminal, software, online,
etc.
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