- A merchant account services involve an arrangement with a bank or clearinghouse to accept credit card payments into a special bank account set up for your business.
- A merchant account takes the credit card information and approves the transaction for you. By authorizing each request, the merchant is protected from fraudulent cards or cardholders that have exceeded their credit limit.
- Then the bank collects funds from the bank that issued the credit card.
- Sends the payment to the merchant.
You might also know merchant account services as credit card processing. Each step I've described here is much more complex, but paying for merchant account services takes on that complexity so you don't have to. You might be thinking that this service sounds too good to be true and must be very expensive. It actually is the most cost effective way of accepting credit card payments. You also have the option of choosing to have one service to authorize the payments and get a merchant account yourself with your chosen bank. Some new businesses find it simpler just to use the all-in-one service. Either way, merchant account services are the way to go!