Merchant Accounts Explained - Introduction
The below information is designed to explain what Merchant Accounts are in simple terms and what a Merchant will require prior to using CardStream as their Payment Service Provider (PSP).
There are two main types of Merchant Service, the first is for a Merchant to be issued their own Merchant Number from an Acquiring Bank and the second is for a Merchant to use another company's Merchant Number, through what is called a Merchant Bureau Service.
A Merchant having their own Merchant Number is the best option as it will give the Merchant their own recognised Merchant Status and inevitably the Merchant will start establishing their own trading history. This trading history will help the Merchant to negotiate better 'per transaction' rates in the future. Most Banks do not view trading under a Merchant Bureau as a recognisable trading history.
Merchant Accounts Explained
There are three main types of Merchant Numbers, as listed below. They are categorised according to level of risk they present to both the Merchant and the Acquiring Bank in relation to the likelihood that any one transaction might be fraudulent. For example, a purchase made in a High Street Shop would see both the Customer and the Merchant present for the transaction. This would mean that the Merchant can make cross checks using the signature on the card and other forms of Identification to verify that the person using the card is the person authorised to do so.
Credit card processing and Debit Card transactions are differentiated by the presence or absence of either or both the Merchant and the Card Holder at the time of the transaction. For Internet Transactions neither the Merchant nor the Card Holder is present at the time of the transaction and the transaction is referred to as Card Holder Not Present (CNP) / Merchant Not Present (MNP).
| Type | Merchant Presence | Cardholder Presence | Example | |
| Traditional Merchant Number | Present | Present |
High Street Shop This is where the card is swiped or chip-and-pin are used at the Point Of Sale (POS). |
|
| Mail Order Merchant Number | Present | Not Present |
Mail Order Company This is where the Card Holder telephones or faxes Payment Details to the Merchant, the Merchant then manually inputs the details into either a Credit Card Machine or a Virtual Terminal. |
|
| Internet Merchant Number | Not Present | Not Present |
eCommerce Company Any Merchant using the Internet to sell their goods or services by way of process credit card processing or debit card transactions online. |
|
Merchant Accounts Supported
The Cardstream Global Payment Gateway is integrated into all of the major acquiring banks in the UK and, therefore, supports Merchant Accounts provided by them; for a full list of the supported banks please see Merchant Bank Contact Details. It is likely that if your bank does not appear on the list, it will be serviced by one of the larger banks that CardStream does already support.
