Analyzing Your Merchant Account & Payment Options

    Merchant services are just typical financial services that offer a wide range of financial processing options. It has now been adopted by systems and business where the clients to that business are allowed to pay for the products and services of the business using encrypted means that involve the client’s debit or credit cards.

    The only requirement of these services is for the client to have a valid account with the ‘person’ providing these services either directly or from a person who has an account and referred or allowed them to use their account. Example of merchant services providers include common banks and businesses that carry out direct transactions that are commercial with each other.

    Merchant services have a wide range of operations that are within their scope:

    Credit and debit cards payment processing

    A payment processor is a third party entity in a business transaction that is trusted by a merchant (mostly a middleman or broker who sell goods that they have not produced) to handle payments for goods that are received from the channels mentioned for the merchant’s bank.

    Payment gateways

    These are operations of the merchant services that are provided via some electronic commercial software used to authorize electronic payments from transactions that are carried out online. These gateways are provided by the merchant’s bank to complete the services that are offered by the payment processors.

    Transfer of benefits electronically (an example is ration stamps)

    Rations can either be in form of cards or stamps that allow a merchant to have access to specified commodities that have a shortage in specific times like emergencies (drought, war or floods). These times force governments and other general institutions to ration the sale of commodities that are scarce.

    Point of Sale (POS) Systems

    These are points where clients or merchants payed for the goods or services that have been acquired. Traditionally, they only involved a cash register and a reader that would allow payments to be made using credit and debit cards. With the evolution of technology, they now are a combination of hardware and software elements that centrally place the management of business transactions in one point for better service delivery to merchants.

    Loyalty gift cards and programs

    Gift card or voucher are a pre-transacted amount of money issued by a bank or a business to its loyal clients in loyalty programs (promotion strategies by merchants to keep clients in their businesses) as an alternative method of payment to buy goods or services from a related entity as a reward and encouragement of future business operations together.


    Automated House Clearing (AHC)

    It is a big network of transactions that allow merchants to carry out direct payments without having to hand the payment currency physically. A good example is interbank transaction that is used for large amounts of money for efficiency and safety purposes.

    These merchant services are now being universally accepted because they diversify financial processing and hence it is important to learn methods of getting the best rates when planning to include them in the methods of carrying out business:

    Consultation and research

    It is also good practice to interact with merchants that have a good history and accounts with good rates so that they can share a few tips on custom risk solutions. Research from a new merchant also helps them to review the payment processor choices that they have so that they are able to make informed decisions in choosing a company.

    Humble beginning

    For new businesses which definitely mean new accounts with the merchant service providers, it is important for the merchant to go for an account that has lots of restrictions and higher terms because they do not have previous experiences. Later negotiations can be made on the rates and reserves of the account when there is enough processing history for the payment processor to review for consideration.

    Better chargeback management

    Chargebacks are a major contributor to high-risk merchant accounts being closed because they are an indicator of poor goods of services to customers thus having to reverse the funds even before actual payment was made. Low chargeback ratio can be attained by: better communication with the customers regarding satisfaction with the goods and services provided and better fraud detection techniques like verifying the client information.


    This is an important virtue in real life and also with merchant services. It is important to be transparent with the processing company regarding the operations, services and goods that one deals with. This is helpful in avoiding account closure without notice. A high-risk account informs the payment processor of the risks that are associated with the operations of the business and hence be prepared in advance.


    Giving details of previous accounts that have been handled by the merchant helps the processor in determining the kind of merchant one is and how best they can deal with them for better and proper business efficiency. This is still important even with a bad history associated with the merchant and previous accounts because the processors would find out anyway.

    Payment processor choice

    It is important to look at the terms that are offered by different processing companies in terms of fees and general costs and commitments the merchant’s processing needs to determine the best company to work with. A processor with good quality provides guarantee for increase in the rates of the accounts as time progresses as they not only offer good services but also good communication for efficient accounts.


    Because most of the transactions provided by the merchant processing services are electronic, it is important for the merchant to get good ecommerce support that will ensure streamlined business transactions operations. This includes the purchase of the software and related hardware plus having an in-house support team rather than leasing them all out.

    As they say in business, the higher risk the higher the returns and therefore it is important to go for high-risk accounts and using the above tips to better the rates that will be provided by the same account.