4 Types of Merchant Accounts and How They Differ from One Another

The four types of merchant accounts are: retail or traditional merchant account; Internet merchant account;  MOTO or mail order - telephone order merchant account; and, wireless or mobile merchant account.  Normally, these types of merchant accounts differ in these two major aspects: on the transaction fees incurred and on the rules or restrictions that govern each type of account.

Whatever kind of business you have, there is a need to have a merchant account in order to increase and eventually maximize your sales. Whether you have a physical store, an online business, or even a mobile business, incorporating a merchant account to it will definitely generate more sales. It can attract more customers primarily because we are now dealing with a cashless society. The type of merchant account you should acquire should be an answer to the type of trade you are into.  Below are the four types of accounts which are differentiated from one another to aid you in your decision-making in choosing for the most suitable one for you:

Retail or traditional merchant account

This is intended for a retail type of business like department stores and grocery stores. The card should be physically present upon item purchase, and the card should be swiped through a  card terminal which should be found inside the store premises. This type of merchant account charges the lowest discount rate, but then it charges a higher rate for monthly fees.

Internet merchant account

Internet accounts are quite similar to a MOTO account in terms of rules and rates. This is the most in demand nowadays. This is because of the increasing online businesses that are sprouting. This merchant account is used by vendors to sell their products over the net. The card payments are processed through a virtual terminal or by employing the services of a payment gateway. The discount rates charged are on the medium range while the rate for monthly fees are from middle to high.

MOTO or mail order - telephone order merchant account

This merchant account allows purchase of items without having to leave your house. You can order by phone or by mail order. Its discount rate is higher. However, the other fees are low.

Wireless or mobile merchant account

This merchant account type is appropriate for mobile businesses and professionals. This is designed to accommodate payments anywhere when necessary.  A mobile merchant account service is recommended for contractors, landscapers, etc. Wireless merchant account uses a credit card machine like that of a traditional or retail merchant account. The only difference is that wireless machines is using a wireless network while a retail card machine is connecting to a telephone line.  When it comes to monthly fees, this a mobile merchant account offers higher discount rates, while the monthly fees are lower.

merchant accounts are very useful to businesses. In fact, a business can even have more than one type of merchant account. It all depends on the growing needs of a particular business.