Merchant Account Solutions

Merchant Account FAQ

AMS Advantage
Merchant Account FAQ

Listed below are frequently asked questions dealing with merchant accounts and payment processing. If you have a question that is not listed below, please contact us.

  • Can I use someone else's merchant account to do my transactions?

No, this practice is known as "credit card laundering" or "factoring." It is against the Visa® and MasterCard® agreement. Using someone else's merchant account to process your credit card transactions can lead to heavy fines and perhaps more. In addition, you'll also put that merchant's credit card processing account in jeopardy.

  • What is a merchant account?

A merchant account is an account at a financial institution that allows you to accept credit cards. You may find that you can acquire a merchant account directly from your local bank or you may decide to use any of a number of Merchant Account Providers that can be found using your favorite search engine.

  • Why are rates higher for Internet, Mail and Telephone Order transactions?

Face-to-face transactions where the credit card is swiped is considered less risky by banks. Since this is the case, rates are quite a bit lower as the instances of fraud and chargebacks are a lot less.

The turnaround time can vary from company to company, however it can take as little as 24 hours to two weeks. Very high volume and International merchant accounts seem to take the longest. Companies that allow you to fax applications can usually have you up and running in a few days. One other factor may be the number of applications the bank is reviewing for approval.

  • When are funds usually placed into my business checking account?

The typical time period is 2 to 3 business days.

There are a wide range of solutions for all types of businesses. Swipe terminals for retail merchants; real-time processing for Internet sites; PC software for mail order/phone order and Internet businesses; touch-tone processing for low volume, seasonal and mobile merchants; and virtual terminals for Internet, mail and telephone order businesses. Each have their own pros and cons, ask your sales representative which is best for your business.

  • Are Internet merchant accounts compatible with all shopping carts?

No. Shopping cart companies make their software compatible with certain secure payment gateways (ie. Authorize.net, Verisign, etc.) In addition, merchant account companies work with different secure payment gateways so their clients can process credit cards online. It's important to take to find out from your merchant account company what secure payment gateway you'll be using. If it's Authorize.net, you can expect most shopping cart companies will support that gateway.

A chargeback is what it's called when a transaction is reversed. In other words, rather than adding money to your account it is deducted. Chargebacks can occur for a wide variety of reasons, such as double-charging, credit card expiration, bank error and customer disputes.

  • What kind of transaction reporting is available?

Most merchant account companies will provide you a paper statement at the end of the month. Some companies can even offer detailed online reporting.

I have a credit card swipe terminal from a previous merchant account, is it compatible other companies?

Probably. You will certainly need to have it reprogrammed to work with your new merchant account. There are some companies that only work with certain terminals, be sure to inquire before signing up.

  • What is a monthly minimum fee?

This processing fee is collected by your transaction and discount rate fees from your credit card sales each month. So, for instance, say your merchant account company charges $25 as a monthly minimum, if the transaction and discount rate fees collected by the processing company add up and equal or go over $25 that month, no monthly minimum will be charged. However, if the fees for that month do not meet the $25 monthly minimum, you will then be charged the difference. You can avoid this fee in many cases by just processing a few thousand dollars per month.

  • What is a discount rate?

Discount rates are basically a percentage that is taken from the charge that is being processed. For example, if your discount rate is 2.35% and you have an order for $100, the discount rate being deducted would be $2.35.