LATVIA | eComCharge, a Latvian-based European Payment Service Provider, offers its customers to open a direct merchant account within the framework of its bePaid payment solution. A so-called Merchant Account allows merchants to accept card payments (like MasterCard and Visa) on the internet and receive the card payments in their designated bank account.
Two types of Merchant Accounts
Basically there are two types of Merchant Accounts. One of them is direct merchant account, the other is a third-party merchant account, or aggregated account. The latter one, an aggregated merchant account, allows merchants to accept cards via a party that has the connection to one or more card processors (merchant acquirers) and receives the card payments on behalf of many different merchants. The merchant receives its card settlements from the Aggregator and pays its card commission and fees directly to the aggregating provider. This option is often used by small startup companies: it is the simplest, fastest and sometimes the only solution to start processing cards. Merchant Acquiring Banks seem to be not eager to open direct merchant accounts for the newbies in business due to risks of potential fraud and change of bankruptcy (merchant acquirers bare the costs of disputed card transactions in case the ecommerce business goes bankrupt).
Aggregating Merchant Accounts More Exposed to Risks
The users of Aggregating merchant accounts are exposed to a number of disadvantages, such as substantial hold times and precautionary balances. The biggest danger is that the imprudent actions of one merchant may entail undesirable consequences for all other merchants whose transactions were proceeded through this aggregated account. It could lead to the total suspension of bank payments. By using direct merchant account one can avoid these risks. The troubles of other merchants do not affect the processing and settlement of the merchants with their own, direct merchant account.
Direct Merchant Account Advantages
Direct relationships with the acquiring bank create a more secure processing environment, providing lower discount rates. In addition to this, merchants receive their own billing descriptors which help identify the merchant’s name in their billing statement. If your customer does not recognise your company's name on his or her credit card statement (as it sometimes happens with a merchants who appear under the aggregator’s name), the transaction may be disputed and lead to a chargeback. In case of a chargeback the original card transaction is reversed by the acquiring bank and the merchant's bank account will be debited - resulting in a financial loss. Since all transactions pass through the acquiring bank, the money goes straight to the merchant’s account and not the the aggregator’s. It prevents some potential risks (i.e. those caused by aggregator’s bankruptcy) and often allows merchants to receive settlements more swiftly.
Opening Direct Merchant Account through a Payment Service Provider
Despite all the advantages of direct merchant account, a lot of merchants find the process of its acquisition too troublesome. Meanwhile, opening direct merchant account through a Payment Service Provider can significantly simplify the procedure. eComCharge provides bePaid clients with professional advice and assistance on all administrative and technical details with the partner acquiring bank, offering the most beneficial rates and terms. In fact, bePaid works as a one-stop communication center for merchants. There is no need to spend your time looking for better conditions in various banks. An application indicating your preferences is just enough, the company will do the rest and pick up the solution that suits your needs best of all.
bePaid Payment Solution
bePaid lets e-merchants to accept and process multi-currency payments from the leading international and local credit and debit cards (Visa, MasterCard/Maestro, American Express, Diners/Discover and JCB). Payment security best practices are assured to the bePaid users. Advanced real-time statistics and reporting tools, fully PCI DSS Level 1 compliant payment gateway along with 3-D Secure and MaxMind built-in modules help to reduce fraudulent transactions, creating safe payment environment and, as a result, convenient working conditions. Visit the eComCharge website to discover a wide range of bePaid benefits.
eComCharge is a payment service provider, certified in accordance with the requirements of PCI DSS Level 1, a payment solutions developer and a technical integrator of payments. eComCharge cooperates with leading European and international banks, processors and payment systems to provide comprehensive solutions for businesses. Check out eComCharge's profile.