Merchant Account Reviews

The Different Types of Merchant Accounts

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Every merchant is classified into one of the several merchant account categories available, all based on how they collect and process the credit card information. To find out which category your business falls under, review the information below.

There are two main category types 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.

  1. 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.
  2. 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 merchant would be a limo driver or a pizza delivery.
  3. 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.
  4. 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. Example merchants would be hotels, motels and bed & breakfasts.
  1. Internet / Ecommerce 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.
  2. 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
  3. 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 that allows you to swipe a credit card, you can use a service like touch tone that allows you to take the information in person, but key it in over the phone.

Credit Card Processing Articles
  1. Why Should you Accept Credit Cards?
  2. The Different Types of Merchant Accounts
  3. How to Avoid Credit Card Processing Downgrades
  4. Merchant Account Responsibilities
  5. The Different Types of Credit Card Machines
  6. What is a Merchant Account?
  7. Why Avoid Credit Card Terminal Leases?
  8. 3 Ways to Save Money on Credit Card Processing
  9. Credit Card Processing Checklist
  10. Pros & Cons of Credit Card Processing
  11. What to Expect in Your Monthly Statement
  12. The History of Credit Card Processing
  13. Recent History & Future of Credit Card Processing
  14. The Different Organizations of Merchant Services
  15. The Glory Details of Disputes, Retrievals & Chargebacks
  16. Understand All the Risk with Merchant Services
  17. Factors & Guidelines to Merchant Service Underwriting
  18. The Life Cycle of a Credit Card Transaction

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