Merchant Accounts

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Merchant Accounts

You will need an internet-ready merchant bank account in order to accept credit cards online.

Talk to your bank about how to get an internet merchant bank account. You may already have a real-world merchant account, but doing business over the internet is different in some respects, and your bank will need to help you set that account up separately.

You will need a processing gateway company to be the link between your bank, your web site and the person with the credit card.

The gateway company acts in-between your bank, the credit card companies, and your site. They receive the request to process a card transaction from your site, and they ask the credit card company in real time to accept or deny the payment. Then they report back to your site in real time as to what happened. At the end of the day, they send your bank info on what credits or charges were posted to your account.

These are some of the better companies providing the processing part of accepting credit cards:

An internet-ready merchant account is the most common way for you to process credit cards through your web site.

A merchant account is an agreement between you, the merchant account company, and the credit card people, which says that you all agree to abide by each others terms.

How to get a merchant account:

The most common way to get a merchant account is to go to your bank - but you can go to third party companies that deal with their own banks and can set you up with a merchant account also.

We recommend starting with your bank. Or contact a reputable merchant account provider such as for more information.

Your bank will offer you certain terms, much like loan terms, when you apply for a merchant account. You don't need to use your current bank if you don't want to - many financial institutions offer merchant accounts.

Most merchant accounts offer free sign up, but there will be a monthly fee. We pay $40 a month for a full-featured merchant account through Wells Fargo Bank and Authorize.Net to give you an idea of the general cost.

After submitting your application and fees, your account should be approved, and you'll be provided with and ID/acct. number and a password for your account. Sometimes these are called a MID (merchant ID number) and TID (terminal ID number).

Log in to your ClientReady web site, click "My Settings" and then click 'Pay Gateway' and choose your merchant account provider and enter your account ID and password info. Now you'll be able to accept credit cards from your web site!

Sometimes, you will need to tell your gateway company what your web site address is in order to get transactions completed. They want to know the request to your account is really coming from your web site and not somewhere else.

Gateway companies we are already integrated with:

Yes, we are excessive! If you don't see your gateway company here, ask us about whether we can integrate with your gateway company.



This is a serious, and very real danger. When you obtain a merchant account, you should speak with your gateway company to make sure you are imposing some restrictions on which transactions can be processed. We highly recommend verifying the card holders name and ZIP code at least (in addition to having a valid card number), and maybe the street address, or other data before processing a card. Your gateway company will help you set up these anti-fraud measures.

Hackers often get stolen card numbers, but have no other data on who owns them, and try processing them on random sites, often for large amounts of money. Verifying other pieces of data as described above is critical in deterring them. feel free to contact us for more explanation.

What goes on when a credit card gets processed?:

(portions of this information re-printed from Kevin Hakman's tutorial on e-commerce)

Behind the scenes, credit card transactions are pretty complex. They involve a number of independent groups, including you (the merchant), your bank, the customers, the customers' banks, the companies that issued the customers' credit cards, and the large credit and debit "acquiring banks" who manage the whole mess.

All these various groups need to work together before your customers' money can make it into your account.

Here's how most credit card transactions work over the Internet:

  1. Authentication. It's a good idea to make sure the cards you are accepting have valid numbers, have actually been issued, and are not reported stolen.
  2. Authorization. This process checks whether funds are available for purchases. If they are, you can put reservations on those funds. But hold on — you don't get the money yet.
  3. Settlement. Once you've shipped the products or delivered them to the customers, then you let the banks know. The banks will release the funds that were previously reserved, and the money will make its way through numerous banks and intermediaries into your account.

That's how most Internet transactions are processed. But they can get a lot hairier. For instance, how will you process returns? How will you handle partial sales? How will you deal with back orders? How will you fulfill partial orders? Take these back-office issues into account when you select the solution to maintaining your payments.
A number of applications are on the market today. Most have evolved over the last several years and been tested under a variety of conditions. Additional information can be found at the websites of these vendors:

  • Authorize.Net
  • Verisign
  • PayPal
  • Google