What is an Ecommerce Merchant Account?

An ecommerce merchant account is a type of account that allows online merchants to accept credit card payments over the Internet. It is different from the traditional retail merchant account, which usually is designed to support merchants collecting payments within a brick-and-mortar store. The most significant difference between the two usually is fees.

With the ecommerce variety, the fees typically are higher due to the assumed higher risks associated with online payments as opposed to face-to-face transactions. Obtaining an ecommerce merchant account can be critical, however, for anyone who wants to sell products or services online. This often is the case even if a merchant already has an account for their physical store.

One can apply for an ecommerce merchant account through a merchant service provider (MSP) such as a bank, or companies known as an independent service organization (ISO). Banks generally are considered more reliable, but they also tend to be far more selective in terms of the approval process. For example, a bank may require that a merchant has a certain credit rating or meets other strict qualifications.

Because they are unregulated, ISOs usually are more flexible, and acquiring an ecommerce merchant account from them often is considerably easier. It is important to keep in mind that several of these firms charge high premiums for taking on the risk associated with online business. Therefore, merchants may want to brace themselves to pay a little more.

One of the most important components of ecommerce integration typically is the payment gateway. This software service acts as an intermediary between the shopping cart and the financial entities involved in the transaction. Typically, this includes a merchant account and the customer’s credit card company.

A payment gateway usually is vital because it checks for validity and encrypts sensitive information included in the transaction. It typically is a seamless, transparent process in which all the components of the ecommerce system play a vital role. Being that these two elements are dependent on one another, many providers offer integrated solutions featuring merchant accounts and compatible gateways.

Integrating an ecommerce merchant account into a Website can be a smooth process with a little help from a Web host or system administrator. Once everything has been properly set up, merchants should have a more reliable way to facilitate credit card processing and to efficiently service their customers. When transactions are made, merchants also can better assure that the money is securely deposited into their account.