From helping you obtain the equipment
you need, to explaining transactions step-by-step, Innovative Merchant
Solutions gives you "know-how now" to get you started as a Innovative
Merchant Solutions merchant.
What is a merchant account?
A merchant account gives a business the
ability to accept credit cards as payment for the company's goods and
services. This provides your customers with an extremely popular payment
option, beyond cash and checks.
Studies have shown that merchants can typically increase their business by
50% to 80% or more-sometimes even hundreds of percent. Plus, customers are
more willing to purchase higher-cost goods using a payment method that
offers them repayment flexibility. It is projected that by 2002, credit card
transactions will account for 98% of Internet sales, equaling $55.6 billion.
Innovative Merchant Solutions of PA Inc., specializes in setting up
businesses of all types throughout the country with merchant accounts and
credit card processing solutions. Whether you need a retail merchant
account, Internet merchant account, or mail/phone order merchant account we have a cost effective merchant account
solution that is right for your business. Our merchant account rates
are some of the most competitive processing rates in the industry.
How does a merchant account work?
How it works with retail or swiped
A customer provides your business with a non-cash payment, such as a credit
card, for a purchase.
A transaction then occurs by either swiping the credit card or manually
entering the credit card information into the terminal.
An electronic transaction occurs through your credit card terminal which
either approves or denies the transaction payment. If approved, your credit
card processing service will credit and deposit money into your bank account
the amount of the transaction within 2 to 3 days, less any fees (discount
rate and transaction fees) per transaction.
How it works with internet accounts:
The consumers complete their orders via the
merchants web store. This should be done on a secure web page so that the
consumer's personal information including banking information (credit card
or check) is encrypted so that it can't be intercepted and read by third
parties while being transferred over the internet. Secure pages should always be used
while handling credit card processing online.
The shopping cart program on the web host
computer gathers the order information, compiling it into a form that the
credit card processing company expects.
The shopping cart transmits the formatted
order from the web host to the credit card processor (payment gateway). The
credit card processor checks that the information it received about the
order to be sure it has everything it needs to continue processing the
transaction. It then determines what company manages the customer's credit
card and transmits a request for the card to be charged.
The customer's credit card company validates
the card and the account. If everything checks out correctly and the credit
card is clear for purchases the credit card company sends an acknowledgement
back to the card processor that the amount requested can be transferred. If the credit card
company denies the charge it sends a code back to the credit card
processor indicating what the problem was.
The credit card processor now tells the
shopping cart program at the web host whether or not the transaction was
successful (the shopping cart then can tell the customer whether or not the
order was complete and send the order on to the merchant for delivery of the
product or service). The credit card processor initiates a funds transfer
(settlement request) to the merchant account company for deposit into the
merchant's bank account that it has on record.
Internet merchant accounts collect the funds
for a specified period of time and make scheduled transfers to the
merchant's regular bank account and the credit card processing transaction
How do discount rates and transaction fees work?
Our merchant account fees are broken up into two parts: the discount rate and
the transaction fee. The discount rate
percentage of each transaction that the acquirer charges to the merchant in
order to process the charge.
Because the discount rate is a percentage of the total ticket
amount, the amount deducted from the merchant account will vary depending on
the ticket size. The transaction fee, on the other hand, is a fixed amount
also taken from each transaction. The transaction fee always stays the same.
For example, if a merchant has a credit card sale for $100 and the discount
rate is 1.70% and the transaction fee is 25 cents, the calculations are:
($100 x 1.70%) + $0.25 = $1.95. In this example, $98.05 is deposited into
that merchant's merchant account and $1.90 is deducted to pay for processing
the transaction. Let’s now say the credit card sale is for $1000, and the
discount rate again is 1.70% and the transaction fee again is $0.25, the
calculations are: ($1000 x 1.70%) + $0.25 = $17.25. In this example, $982.75
is deposited into the merchant’s merchant account and $17.25 is deducted for
processing the transaction. As you can see the amount taken for the discount
rate varies, where as the amount taken for the transaction fee stays the
same. Please see our FAQ for any additional questions you may have.
What is the difference between "card present" and "card not present"
There are two different types of credit card transactions, "card present"
or "swiped" transactions and "card not present" or "keyed" transactions. A
transaction qualifies as a "card present" or "swiped" transaction when the
customer and credit card are present at the point of sale. The transaction
then takes place when the card is swiped through a terminal such that the
card holder’s information is obtained by reading the magnetic stripe on the
back of the card. "Card not present" or "keyed" transactions take place when
the credit card information is keyed into the credit card terminal, usually
without the credit card or customer present at the time of the sale. The
discount rate for a "card not present" transaction is slightly higher than
that of a "card present" transaction because the likelihood of fraud or the
chance of having a customer return an item is greater.
How do I get a merchant account?
You can request information by filling out our brief
Or you can call 1-800-328-2269 to speak to a new accounts
representative. We will answer and questions or concerns you may have.