INTERNET MERCHANT ACCOUNT – WHAT IS THAT?
In today’s, cashless word majority of financial transactions happen by using plastic money. To understand What is an Internet merchant account we need to understand few elements that are listed below.
WHO IS AN INTERNET MERCHANT AND WHY HE NEEDS AN INTERNET MERCHANT ACCOUNT?
An internet merchant is a company or an individual that offers products or services over a web storefront or shopping website. Once the Merchant has all the products and services listed and all the marketing is in place at the point in time the need for a merchant account arises. This Internet merchant account allows the merchant to accept payments from buyers.
WHAT IS AN ISSUER BANK?
An issuer bank is a bank that offers Credit Debit Card to the Buyer.
WHAT IS CARD SCHEME?
It is a Payment Network linked to various well-known cards. The Banks can become the member of the same and then they can offer credit or debit cards to the cardholders.
WHAT IS A PAYMENT GATEWAY?
A payment gateway is a Secure IT infrastructure utilized in the payment processing system. It securely accepts, stores and forwards the transaction related. This information is forwarded to the acquiring bank.
WHAT IS AN ACQUIRING BANK?
An acquiring bank is a financial institution that offers a Merchant Account to the seller. This acquiring bank covers the maximum risk in the entire transaction process.
WHAT IS INTERNET MERCHANT ACCOUNT – IN DETAIL?
A merchant account is a special bank account that works as a bridge between 3 parties
- The Merchant
- The Payment Service Provider
- Acquiring Bank
Step1: – The Payment request is originated from the merchant’s website, VT, Moto, Mobile App, POS or POB.
Step2: – The Request is forwarded to the Payment Gateway. This Payment Gateway has to be PCI DSS compliant for the card information security.
Step3: – The Payment gateway sends the request to the Merchant Acquiring bank.
Step4: – The Request is further sent to the Card Scheme
Step5: – The Card Scheme send the request to the Card Issuing Bank.
If there are no declines in the process then the transaction is confirmed and the buyer gets a confirmation via the merchant’s notification system.
Throughout the process, all parties have the ability to have a 2-way communication that means at any step if the transaction is restricted or declined the previous party will get the info and the same will be shared with the merchant.