Merchant Accounts for E-Commerce Merchants in 2021 | Platinum Payment Systems



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A big-ticket item in the world of e-commerce, and something that you literally cannot live without as an e-commerce merchant is a merchant account.

These business bank accounts are what allow you to accept and process electronic payment card transactions safely and securely. It acts behind-the-scenes as the ‘middle-man’ between your customer’s bank account and your business’s bank account so that you can be paid for your goods and services.

Such accounts are set up for you by merchant service providers like Platinum Payment Systems, which offer you the hardware, software, and support that you need to get started.

If you want to learn more about the nuances of merchant accounts and how an e-commerce merchant account differs from a traditional retail merchant account, continue reading!

What is a Merchant Account?

As mentioned above, a merchant account serves as the middleman that works behind the scenes to allow you to accept your payments.

To get a merchant account, you must undergo an application or evaluation process with a payment processor — like the aforementioned Platinum Payment Systems (PlatPay). For this, you must be able to provide accurate and concise answers about your business as well as the proper documentation. Much like when dealing with other financial institutions or agencies, you would want to have your financial documents ready so that you can get the best terms of approval. Although, a cover letter describing your business and why you believe it deserves approval for a merchant account should also suffice.

Once your application for a merchant account has been approved, and you have all the hardware and software required (these are sold by payment processors as well) for the type of transactions you want to accept, you can begin accepting and processing payments!

E-Commerce Merchant Accounts

Because of the world-changing effects of COVID-19, these days, even extremely traditional retail merchants are starting to look towards being more digitally oriented.

So, what’s the difference between a retail merchant account and an e-commerce merchant account? Well, to answer that, we must first look at their similarities. And, while each business has its own unique needs when it comes to how they want to be able to accept and process payments, here are some of the constants:

  1. Payment Gateway: While they may take different forms depending on the transactions being processed, both retail and online merchants need some form of payment gateway that will allow them to actually accept payments.
  2. Monthly Fees: This is the fee that pays for the services of the processor. The cost of which will vary depending on the processor that you decide to work with. (Note: Online merchant accounts naturally have higher monthly fees than regular accounts.)
  3. Transaction Fees: Depending on your rates, these are the fees that you must pay for every transaction that is processed using your merchant account. Again, when it comes to transaction fees, online merchant accounts have higher rates.
  4. Batch Fees: These make up all the sales that you’ve made in one single day, which is transferred to your business checking account all at once rather than per transaction — whether you are a retail merchant or an online merchant.

As for their differences, retail businesses require terminals or swipers to allow their customers to physically swipe their credit and debit cards so that they can accept transactions.

That is not the case for electronic transactions, which are Card-Not-Present transactions performed through virtual gateways — where the credit owner must input their credit card information manually to purchase a product or service.

For this reason, you may have a more difficult time being approved for an online merchant account than a regular retail merchant account. As businesses that require online merchant accounts naturally fall into the “high-risk” category. It’s also why the monthly fees and transaction rates for online merchant accounts are more expensive than merchant accounts for regular retailers (who face less risk.)

Merchant Accounts for E-Commerce Merchants | Final Thoughts

If you’re in the market for a merchant account for your e-commerce business, we really only have one tip for you. This is the same recommendation that we give to all businesses. But, especially more so to those that are considered ‘high-risk.’

And that is… find a payment processor that will actually support you.As stated in this interview with the CEO of Platinum Payment Systems, Jed Morley, “Any merchant processor can process payments for you. It only takes the right equipment, after all.

BUT, the same cannot be said for the ability of these processors to provide the level of support that you’ll need while those payments are being processed.”