Direct Merchants accounts or third-party processors - Where should you get your merchant account from?

Being able to accept online payments gives your customers the convenience of being able to shop from their computers without the hassle of having to stop by your store. Having said that, setting up your online store can be quite a daunting process. This is where having a merchant account can help!

A merchant account can be plugged into your website with an API allowing your business to accept credit card payments. Merchant Accounts are required for both online and offline businesses who wish to accept payments via credit cards. These accounts can be obtained from two sources: Direct with acquiring banks and third-party providers.

Direct merchant account with a Bank

A merchant account provided direct from a bank is often preferred as your account is stand alone can cannot be affected by another merchant chargeback or business and fees are lower. However, the drawback to obtaining the account directly from a bank is banks generally will not provide your business with a direct merchant account if it is believed to be a high risk. To a certain extent, all internet businesses can be labelled "high risk" since the credit card and cardholder are not physically present during the transaction.

Third-party processor

If you are unable to obtain your high-risk merchant account directly with a bank, you will need to turn to a third-party merchant account provider. There are two distinct advantages that third-party payment processors have over banks. Firstly, third-party merchant account service providers often have easier approvals for high-risk business and allow for higher chargeback. It is important to note, though, that if you are in a 'high risk' industry, you will most likely be subjected to higher prices due to the risk.

Secondly, third party account providers often have integrated payment gateway making it easier for you to go live faster having your online business up running in minimal time.

If you are an online business owner — particularly one in a "high risk" industry — there is no better way to accept credit card payments on your site/app than by enlisting the services of a reputed high-risk merchant account processor.