The Different Types of Merchant Accounts

There are two main categories when it comes to credit card processing. They are "swiped" and "keyed". Under these categories, you have several different methods or ways of processing that information.

Swiped is referred to as when you have the customer in person and swipe their credit card. Keyed is referring to when you take the information over the phone, Internet or by fax. It can also be when you are mobile and have the customer in person, but want to use a service that is less expensive and it requires you to key the information in.

"Swiped"

• Retail Merchants - typically conduct transactions face to face in a retail environment. The customer's card is swiped through a credit card machine and their signature is captured on the terminal or on paper.
• Wireless/Mobile - typically conduct transactions face to face but in a wireless environment as there is not a physical store. A wireless terminal machine is used instead of the traditional standalone unit. An example of this merchant would be a limo driver or a pizza delivery.

• Restaurant - typically conduct their transactions face to face in a retail store. The difference is they may require the ability to add tips to their charges. This is done by using the tip function which settles the transaction for the larger amount that includes the tip.

•  Lodging - typically processes their transactions like retail merchants except they may adjust the settlement amount depending on the customer's length of stay or include any additional charges they incurred while staying at the merchant. An example of this merchant would be hotels, motels and bed & breakfasts.

• Internet/E commerce Merchants - conducts business through a web site by utilizing a shopping cart and an Internet payment gateway service. The shopping cart allows the customer to browse, add items to their cart and checkout like at the grocery store. The payment gateway then collects the credit card information and processes it in real time.

•  Mail & Telephone Order (MOTO) - typically take the customer's credit card information over the phone, by mail or through the Internet. They then manually process the transaction by keying it into either a credit card machine or through a virtual terminal such as Authorize.net.

•  Face to Face (mobile) - this type of merchant is typically on the go, such as a vendor at a trade show instead of investing a lot of money into a wireless solution.

"Keyed"

• Internet/E commerce Merchants - conducts business through a web site by utilizing a shopping cart and an Internet payment gateway service. The shopping cart allows the customer to browse, add items to their cart and checkout like at the grocery store. The payment gateway then collects the credit card information and processes it in real time.
•  Mail & Telephone Order (MOTO) - typically take the customer's credit card information over the phone, by mail or through the Internet. They then manually process the transaction by keying it into either a credit card machine or through a virtual terminal such as Authorize.net.
•  Face to Face (mobile) - this type of merchant is typically on the go, such as a vendor at a trade show instead of investing a lot of money into a wireless solution.