MERCHANT ACCOUNTS
What Is A Merchant Account?
A Merchant Account is a specialized type of bank account that allows businesses to accept and process credit card payments. It serves as an intermediary between the business owner, the customer, and the credit card payment system. When a customer makes a purchase using a credit or debit card, the funds are deposited into the merchant account before being transferred to the business owner's primary business bank account.
Merchant accounts are necessary for businesses that want to accept card payments, whether in-person, online, or over the phone. The account is typically set up in collaboration with a payment processor or a merchant service provider, and it enables the secure and efficient handling of electronic transactions. ARC Merchant Solutions is A Merchant Services Provider. This gives us the flexibility to place you with one of the multiple banks we are an agent of and best meets/fits your needs. We also have discretion over the merchant requirements banks enforce and the rates and fees associated with a merchant account with them. Regardless of your business type, partnering with an experienced Merchant Services Provider like ARC ensures smooth payment processing and the best experience possible! We are on your side!
6 SIMPLE STEPS TO EXPLAIN How A Merchant Account Works
1. Customer makes a purchase
- The customer swipes, inserts, taps, or enters card details online.
2. Payment gateway sends the transaction
- If it’s an online payment, a payment gateway securely transmits the payment data to the payment processor.
3. Authorization request
- The payment processor sends the details to the card network (Visa, Mastercard, etc.) and then to the customer’s bank (the issuing bank).
4. Approval or decline
- The issuing bank checks if funds are available and if the transaction is legitimate, then sends back an approval or decline code.
5. Funds go to the merchant account
- Once approved, the transaction amount is placed into your merchant account (not your main business account yet).
6. Settlement to your business bank account
- After a batch of transactions is processed (often daily or every few days), the funds are transferred from the merchant account to your business bank account—minus processing fees.
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