Common Types of Merchant Accounts

If you're involved in a business, chances are by this point, you understand that you can't just use your run of the mill personal account to facilitate all of the incoming and outgoing payments you deal with. If you're receiving payments for goods or services, making you a merchant, you'll need a merchant account. Since there are thousands of different types of merchants, there are correspondingly about a dozen or so different merchant accounts explicitly tailored to fulfill their needs. Each of these accounts is as unique as the businesses they serve, all with their own different terms and conditions.

Here are a few of the most commonly sought-after merchant accounts:

Traditional merchant account

These are the simplest types of accounts and are made to receive money sent over a Point of Sale system in real life, in real time. There really isn't much to expand on with these accounts, and they offer the lowest fees and widest range of available services since there isn't much in the way of complexity. A customer will pay when goods are rendered, and the money will be deposited.

Internet-based merchant account

The next most common account is one that deals with e-commerce. The fees associated with these accounts are slightly higher than traditional accounts because e-commerce tends to have a higher rate of chargebacks and fraud compared to a traditional account. Often, these accounts are specifically made to accept payments from online payment processors such as PayPal, but ultimately, they are quite similar to the average account.

High-risk account

Now, these types of accounts, dubbed as high-risk merchant account, deal explicitly with businesses that tend to require a lot more careful attention and specialized services. Accounts servicing things like adult products, bail bonds, or a subscription-based business can all be considered as "high risk." That's because they need to have protocols in place for things like failure to render payment, consistent returns when products aren't exactly how a customer expects them, or a statistically higher risk of chargebacks. Because of this, they tend to have more fees and less wiggle room when it comes to the exact services offered.

Multiple merchant account

A business that doesn't neatly fall into any of the three categories above will often seek out a multiple merchant account. These types of accounts are meant to take payments in person, online, by mail, or just about any other method of payment. Payments are processed simply and easily regardless of where they are coming from, typically for higher than average fees.

Conclusion

The reason for all of these different types of accounts, instead of just a single merchant account, is that not all payment processors are willing to work with just any type of business. The exact nature of how payments will be received and handled needs to be specifically set up to reduce their working burden, fulfill the needs of their clients, as well as conform to local laws. When selecting an account that works for you, more often than not, the bank you're dealing with will ask for information from you, and then they will recommend which one of their accounts is the easiest and most valuable for you to select, so don't fret that you won't be able to find someone willing to work with you. As long as you're taking in revenue, someone out there will be willing to help you out, for a fee, of course.