Merchant literally means a trader. In a broader sense, it means a person who trades certain goods and products. However, in a narrow sense, a merchant is an online retailer who has entered into a credit card acceptance agreement with an acquirer to enable his customers to pay via credit card. A merchant is a person who sells products to buyers. As a rule, customers can choose between various payment options: at the point of sale, they can pay cash or cashless.
Prerequisite for credit card acceptance contract quite high
Online retailers usually have several payment methods implemented in their stores. However, the technical requirements are complex for integrating a credit card as an online payment. Therefore, the prerequisites are maintained strictly as credit card companies only work with acquirers to whom they have provided licenses. However, credit cards are a popular means of payment among consumers, so many merchants cannot do without this payment facility and adhere to the strict regulations of acquirers.
Acquirers check merchants thoroughly
Merchants therefore have no choice but to work with acquirers if they want to integrate credit cards as a payment method in their online stores. To do this, the merchant must sign a credit card acceptance contract with the acquirer. However, these special contracts are not awarded lightly by acquirers such as First Merchant Solutions, Lufthansa AirPlus Service cards, Deutsche Card Services or Postbank P.O.S Transact. Instead, acquirers thoroughly vet store operators. Therefore, store operators should not approach the credit card acceptance contract in a light manner. It is favorable if the merchant has already generated sales via other payment methods. In addition, the online merchant should have been already operating for a certain period of time, so that he can present the acquirer with appropriate business figures and evaluations. If the acquirer’s review goes smoothly, a credit card acceptance agreement is issued that sets out the details of the payment transactions and their fees. Depending on the arrangement, the credit card sales of an online store are settled on a daily or monthly basis.
Alternatives for merchants without a credit card acceptance agreement
If all efforts are unsuccessful and the merchant does not obtain a credit card acceptance agreement, he can turn to a provider with a master merchant agreement. This provider has a master contract with an acquirer and can grant subcontracts with store operators who could not receive a credit card acceptance contract due to their low turnover or smaller business size.
Antony Robinson is the Chief Marketing Officer at Novalnet. He is an information technology expert and an avid reader with more than 30 years of experience in web technologies, UX, media and marketing. He has extensive experience in managing global teams in every inhabited continent.
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