How does a merchant account work?

As stated before, a merchant account is a type of bank account. How does it work? Basically, there are two main stages:

  1. The funds’ clients spend on your website transfer into your merchant account after the purchase is made.
  2. Then, all the funds deposited to your merchant account are transferred to your banking business account.

The regularity of transfers from your merchant account to your business account varies on a PSP of your choice. It usually takes from one up to 14 days. When signing up for a merchant account through a PSP, you are getting more than just an account. The PSP also provides you with access to the merchant interface. It allows you to monitor the dynamics and volumes of sales.

You can also get PCI compliance, fraud and chargeback prevention, recurring billing, credit card authorization hold, e.g.Some of these options are free, while others will cost you extra. It depends on the PSP of your choice. The traditional merchant account allows you to accept Visa and MasterCard payments only. However, you can also opt to receive a wide range of other payment methods like:

  • eWallets (Skrill, PayPal, Stripe);
  • cryptocurrency;
  • wire transfers;
  • SEPA/SWIFT;
  • mobile banking.

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