OPENING A MERCHANT ACCSOUNT

Whether is just a growing establishment or an already thriving enterprise, only a few easy steps are required to secure a Credit Card Merchant Account. The basic requirements would be: a one-page application, a copy of your business license, an estimate of your monthly sales (including your average and maximum amount per sale) and information on your bank account. A merchant account is usually processed and approved of within two days of submission.
RATES AND TERMS:
There are basically two rates accrued to the merchant:
1. Rates from Card Use: this is usually in form of percentages (usually between 1.6 and 3.5 per cent of transaction amount)
2. Per Transaction fee: (usually charged as 15 to 30 cents per card use)
Rates from volume of sales are divided into three categories:
a. Swiped: This comes from the credit card a merchant swipes across his credit card terminal
b. Card Won’t Swipe: Usually as a result of a damaged magnetic stripe.
c. Card Not Available: Here, the customer can’t produce his card. The merchant then has to manually input names and account numbers into the credit card terminal.
The lowest rates are gotten from the swiped cards, while the highest rates are derived from the customer who can’t produce his/her card, because of the higher risks involved.
TRANSMITTING AND APPROVING:
After swiping is done, there is a transmission for the terminal to the processor, and in under five seconds, the processor analyses the data, checks account numbers and names, accepts or rejects transaction based on account money and afterwards responds to the merchant. Accepted transactions are given a unique identification number used for identification and tracking. At the end of the day, the merchant sends a summary of all the transactions and the daily totals to the processor.

HOW MERCHANTS RECEIVE THEIR MONEY:
The credit card processor compares daily totals for transactions with the totals processed and if they are balanced, z wire transfer is initiated to the merchant with the merchant’s amount minus the processing fee. The merchant should receive payment within 2-3 days of request.

It is usual for the merchant to receive monthly updates showing processing transactions, daily totals, processing fees and other related information.