Merchant account forums

Essentially you do not need your own merchant account to accept credit card transactions online. Third party processors use their merchant account to process transactions on your behalf. This is in exchange for a transaction fee or sales percentage. As a result you do not need to apply for a merchant account through the conventional sources, you can apply directly through the third party processor.

Third party processors are an alternative to banks and ISO (independent sales organisation) merchant service vendors and therefore suit alternative business needs. Here are the typical features and implications of using a third party to process your transactions.

Functions and Implications
If you have had problems attaining a merchant account through a bank or ISO then it’s worth considering a third party processor. Third party processors are an easy and quick way to start selling online. They demand next to nothing in terms of full proof business plans and rarely reject an application. If you have had a merchant account closed, your blacklisted, high risk or have bad credit, third party processor are an accommodating option.

Unfortunately, It is their merchant account and thus you have little say in what goes on.
Most likely as a consequence your customers will be redirected to the third party’s website to purchase a product they found on your website. Therefore the way in which customers interact with your products, your company name, logo, etc. may be compromised and replaced by the third party’s alternative.

As a result of having someone process your transactions for you it will be their name and not yours that appears on your customers credit card bills. You must also follow their rules, which typically specify their right to close your account or hold back funds, at any time.

Discount rates, transaction fees and sales percentages are usually substantially higher than when using a standard merchant account. Third party processors make their money this way and therefore generally do not charge recurring monthly costs that are associated with ISO and banks.

For a more detailed comparison between a third party processor and a normal merchant account complete with its own payment gateway, then check out “…”