People who are operating e-commerce websites or any other online business must be familiar with the term ‘Merchant Account’. But if you have just entered into online marketing with your new start-up, then this article will help you to understand the basic difference between a merchant account and sellers’ bank account.
Knowing the basics of online payment services is very important, especially if you have recently started your online business. Lack of essential information can raise your trouble. It is advised to get all knowledge before taking further step. To get payment from customers, you need to have both merchant account as well as traditional bank accounts. Merchant account will help you to get online payment through credit card, debit card and other payment methods. Similarly with bank accounts you can get cash payments and direct transfers.
What is a Merchant Account?
Merchant account is emerged for the convenience of the merchants. Merchant account works as a link between the seller/retailer and the card network (Visa, AmEx, Master Card) or acquisition bank (HDFC, Standard Chartered, etc.). This agreement helps the merchant to accept credit card transactions. Moreover, if you hold a merchant account, you don’t have to worry much about frauds and security issues. Today there are many merchant account vendors present who provide their services. They processing fee for handling transactions on merchant’s behalf.
Payment gateways hold the credit payment temporarily in merchant account of the seller. After sometime the payment is transferred to the acquisition bank.
What is bank account?
Everyone what a bank account is. It allows you to accept both cash and credit payment from customers. Bank accounts are essential for both traditional as well as online businesses. These accounts can be lock or international as per the requirements of the business. Holding an account in a bank provides you various facilities. Bank can make credit and cash payments of bills on your behalf.
How merchant account is different than normal bank account?
- If we talk about the difference between the two, merchant accounts allows only one way transections. That means, it only accept payments, whereas bank accounts allows both way transactions.
- In merchant account only credit transactions are accepted. On the other hand, bank accounts entertain both cash and credit transactions.
- Merchant accounts hold payments temporarily but bank accounts hold your payment permanently.
Merchant account is different from ordinary bank account. Bank accounts are compulsory for all kinds of businesses, whereas merchant account is required by businesses that are willing to accept online payments.
CartPay solutions provide merchant account to the businesses at the time of registration. We offer our payment solution services to both low risk and high risk business. Contact us for more details.