Lesson Category: Mod 1

1 Review

SUMMARY 1. A merchant account is a line of credit established between a merchant and an acquiring bank that allows the merchant to accept credit and debit card payments. 2. The Merchant Processing Industry is made up of the following roles: Merchants, Cardholders, ISO’s, Sales Agents, Card Associations, Processors, Issuing Banks, and Acquiring Banks. 3. …

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Methods of processing Credit cards

POS TERMINAL A Point Of Sale (POS) Terminal is a standalone piece of electronic equipment that allows a merchant to swipe or key-enter card information required to process a transaction. A terminal mainly serves to process card transactions, but it is common to process additional related transactions through a POS terminal; including gift cards and …

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Low Risk vs High Risk Merchant Types

When a merchant applies for an account, the banks and payment providers look at the potential level of risk associated with opening the account. To payment providers that underwrite the account, they understand that if the business fails, they lose as well. They risk paying the merchant processing fees, customers charging back a transaction, the …

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Types of Merchant Accounts

RETAIL Retail is the most common type of merchant account. Retail merchant accounts are used for businesses providing goods and services in a face-to-face environment. If a merchant will be primarily swiping the magnetic stripe on the card, and doesn’t fall in to any of the other “card present” categories, retail is the type of account normally used. RESTAURANT Restaurant merchants follow …

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Key Players in the Industry

MERCHANT Provides goods and/or services to the cardholder. The merchant must sign a merchant services agreement or contract with the acquirer to establish a merchant account, allowing them to process credit and debit cards electronically. CARDHOLDER Recipient of the credit or debit card from the issuing bank. They are billed monthly by their issuing bank for the purchase of goods and/or services that …

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